Update : Sydney Siege Over : Suspected Jihadist Takes Hostages in Cafe Shop in Sydney

Update: The Sydney siege is over. Media reports say heavily armed police stormed Cafe Lindt Chocolat early Tuesday morning.

Heavy gunfire and flashes were heard and seen with police swarming into the cafe followed by medics with stretcher. It is believed two people were shot dead including the gunman but the casualties are yet to be confirmed by the authorities.

"Sydney siege is over. More details to follow," the New South Wales Police said in a Twitter message at about 2:45 a.m.

The gunman was identified as a 50-year-old Man Haron Monis, of Iranian descent and with a criminal record.

A suspected jihadist is holding around 15 people hostage in a café shop in Sydney, Australia, since early Monday morning. Five other hostages escaped some six hours into the ordeal.

Television footage shows two hostages holding aloft a Islamic State flag against the window of Café Lindt Chocolat and some standing with arms raised above their heads.

The place is surrounded by armed policemen and the nearby buildings have been evacuated. The café is in the middle of the city business center and generally packed with shoppers but the police cordoned off the area and asked people to stay away.

Network Ten reports that the unidentified gunman is wielding a shotgun and a machete, and has asked the hostages to call him "The Brother". He has demanded a dialogue with Australian Prime Minister Tony Abbott.

Another news reports says the one male hostage got in touch with the media broadcaster twice and the jihadist wanted him to talk to the radio broadcaster live but the request was refused as the reported was not a trained negotiator.

"I told the hostage it would not be in his best interest or my best interest to allow that to happen because I'm not a trained negotiator, I don't have any expertise in this, there are people who will talk to both the hostages and the person holding the hostages and they will be knowing what to do," Ray Hadley, the reporter told 2GB Radio.

The gunman is described as middle aged wearing a cap and unshaven. A journalist at the scene tweeted that he was livid after the hostages escaped and could be seen pacing through the windows.

"Just two hours ago when we saw that rush of escapees, we could see from up here in this vantage point the gunman got extremely agitated as he realized those five had got out. He started screaming orders at the people, the hostages who remain behind," the journalist reported, according to Fox news

The gunman claimed to have put a bomb in the café and two others in two different locations in the city .New South Wales Police Commissioner Andrew Scipione told reporters Monday evening that authorities were concentrating on the cafe for now and not concerned with any other location.

It is believed the police negotiators have made contact with the gunman. The prime minister has not responded to the gunman's request but a statement released by his office said that the situation was profoundly disturbing and shocking.

None of the hostages inside have been harmed as yet.