Abbott urges Australians to go about normal life despite Sydney hostage siege

This image taken from video shows people holding up what appeared to be a black flag with white Arabic writing on it.

Prime Minister Tony Abbott is urging Australians to go about their lives as normal despite the terrorist siege in Sydney's CBD.

Emerging from crisis meetings with his national security committee, Mr Abbott gave a brief statement to the media about the "disturbing" events in Martin Place.

"The whole point of politically motivated violence is to scare people out of being themselves," he told reporters in Canberra.

"Australia is a peaceful, open, and generous society. Nothing should ever change that.

"And that's why I would urge all Australians today to go about their business as usual."

Mr Abbott said the perpetrator's motive was still not entirely clear but there were signs he was politically motivated.

App users tap here to view photo gallery of seige at Sydney cafe

Image 1 of 29: NSW Public Order and Riot Squad Police are seen outside the Lindt cafe in the central business district of Sydney. Photo / AAP

An unknown number of hostages are being held inside the Lindt cafe in Martin Place and an Islamist flag is pressed up against one of its windows.

"We have to appreciate that even in a society such as ours, there are people who would wish to do us harm," Mr Abbott said.

The prime minister said he could understand the concerns and anxieties of the Australian people but thoughts and prayers must above all go to the individuals caught up in the siege.

"I can think of almost nothing more distressing, more terrifying than to be caught up in such a situation and our hearts go out to these people," he said.

The prime minister urged people to contact the national security hotline - 1800 123 400 - to report any suspicious activity.

- AAP