DHAKA: The gunman holding people hostage in a Sydney cafe has been identified as an Iranian refugee who was on bail facing a number of charges.

Man Haron Monis, who was granted political asylum in Australia, was described by his former lawyer as an isolated figure, who was acting alone.

Police say they will maintain central Sydney in lockdown until the hostages are brought out unharmed.

Talks with the gunman continued after nightfall as police ringed the cafe.

A black Islamic flag has been displayed at the window. The number of those held in the Lindt cafe is not clear.

Five people have run from the building, located in Martin Place - a busy shopping area in Sydney’s financial district. It is unclear whether they were released or escaped.

It appears the gunman has used three of the hostages to pass on demands, making them stand beside a black flag and having them make statements to a camera.

Prime Minister Tony Abbott said it was ‘profoundly shocking’ that people were being ‘held hostage by an armed person claiming political motivation’.

News organisations say he has contacted them to issue demands, which police have urged media not to report, according to the BBC.

BDST: 2154 HRS, DEC 15, 2014