Inquiry into Sydney siege begins

Hundreds of people have flocked to the scene of a fatal siege in Sydney, paying respect to the victims as a full police investigation gets underway.

Hostages Katrina Dawson, 38, a lawyer and cafe manager Tori Johnson, 34, were killed along with gunman Man Haron Monis, as the 16-and-a-half hour crisis at the Lindt Chocolate Cafe in Martin Place came to an end early this morning. Seventeen people had been held hostage.

Martin Place has become a place for people to gather and mourn, with more than 1000 bunches of flowers laid at the site. Many hundreds more people have signed condolence books, Radio New Zealand reporter Kate Newson said from the scene.

Police have re-opened many streets tonight that had been closed since the siege began yesterday morning, but a cordon remains in place around the cafe.

A large tarpaulin is covering the cafe entrance and police including detectives have been at the scene all day after a major investigation into what happened was launched.

The New South Wales police confirmed they executed a search warrant this morning at a property in the western suburb of Belmore. The would not confirm who lived at the house, but gunman Man Haron Monis was bailed to a Belmore address earlier this year.

People said they hoped others realised that Monis was acting alone and not representative of Sydney's Muslim population. He had been on bail for a charge of accessory to his former wife's murder.

Sydney lawyer Adam Houda, who once represented Monis, said he did not believe his actions were politically motivated.

Monis was an Iranian refugee and self-styled cleric who had a violent criminal history, infatuation with extremism and mental instability. Mr Houda told Radio New Zealand's Checkpoint programme he did not believe his actions were the result of political ideals.

"I believe that his grievances weren't political or religious. I just believe that he had issues with the authorities here in Australia. That's why I thought the negotiations with the authorities were going to prove difficult, because his actions were because of what he'd perceived the authorities had done to him."

Meanwhile, flags in Sydney and other Australian cities are flying at half mast and hundreds of people have come to lay flowers outside the cafe and pay their respects to the victims.

Mr Johnson was the manager of the Lindt Chocolate Cafe in Martin Place and Ms Dawson was a Sydney lawyer and mother-of-three who was a customer at the cafe.

Sources have told the ABC that Mr Johnson was trying to wrestle the weapon away from the gunman when he was killed.

In a televised speech, Australian Prime Minister Tony Abbott praised the resilience of Australians and thanked police.

Mr Abbott said it was tragic beyond words that people going about their everyday business should have been caught up in such a horrific incident.

"As the siege unfolded yesterday, [Monis] sought to cloak his actions with the symbolism of the ISIL (Islamic State) death cult," he said.

"These events do demonstrate that even a country as free, as open, as generous and as safe as ours is vulnerable to acts of politically motivated violence, but they also remind us that Australia and Australians are resilient and we are ready to respond.

"Sydneysiders can be proud of their calm on what was a very difficult and testing day."

Mr Abbott said it was a tragedy that decent, innocent people got caught up in the sick fantasy of a deeply disturbed individual.

Watch footage of the end of the siege

In dramatic scenes early this morning, police in body armour and armed with assault rifles entered the building, loud bangs and shouting were heard and and a group of hostages ran out.

Shots were fired during the confrontation between police and the hostage-taker shortly after 2am and the 50-year-old gunman was killed.

Mr Johnson and Ms Dawson were pronounced dead after being taken to hospital.

Three women, aged 75, 52 and 43, had gunshot wounds and were in hospital in a stable condition, and a 39-year-old male police officer has been discharged after being treated for a gunshot graze to his face.

Two pregnant women were given treatment for health and welfare purposes and are both stable.

The cafe had been searched and no explosives were found, police said.

At a media conference this morning, NSW Premier Michael Baird and Police Commissioner Andrew Scipione confirmed the deaths.

Mr Scipione said police had accounted for 17 hostages. "That includes the five that escaped yesterday and a number that have been caught up with, some with, traumatic injuries - some with medical conditions," he said.

Mr Scipione would not confirm whether the two hostages had been killed by the gunman or were caught in crossfire, saying it was not the time for speculation.

"While everyone might now second guess as to what has actually occurred in the last hours, well, (our police) are the ones who had the make the decision, said Police Commissioner Scipione.

"I want to point out they have saved lives, they have saved many lives. And to those men and women, all that were involved, we thank you."

He stressed it was an isolated incident carried out by an individual and people in Sydney should not be afraid to go about their lives as normal.

Mr Baird said the city had been shaken by a tragedy that none could have imagined.

"The values we held dear yesterday we hold dear today," he said. "They are the values of freedom, democracy, and harmony. These defined us yesterday, they will define us today, they will define us tomorrow."

The hostage situation was continuing in near darkness from about 8.30pm yesterday when the cafe lights were switched off.

Seven Network reporter Chris Reason, at the station's offices opposite the cafe, posted on social media at midnight he could still make out hostages being moved around by the gunman.

The crisis escalated about 2am local time when five more hostages ran from the cafe.

One man ran out with his arms raised to police, who patted him down and escorted him to safety.

Minutes later, two more men and two women raced outside and were directed away by police.

Their escape was followed by what sounded like rapid gunfire as heavily-armed officers stormed the cafe.

A second volley of shots erupted before the cafe filled with police and paramedics.

A woman, thought to be middle-aged, was among at least four people carried from the scene on stretchers.

Police officers then entered the building and were soon followed by emergency staff.

The ABC is reported at least one hostage had CPR performed on them as they were being carried out of the cafe on a stretcher.

As the crisis deepened overnight, scores of people waited at the cordon a block away from the cafe and later relatives of hostages gathered in a nearby street.

Earlier, police confirmed to Radio New Zealand the man behind the siege was Man Haron Monis, who had been on bail for a charge of accessory to murder.

The Iranian man, also known as Sheikh Haron, was convicted last year over offensive letters he sent to family members of Australian soldiers killed in Afghanistan between 2007 and 2009.

The centre of the city has been in lockdown since Man Haron Monis seized the hostages yesterday morning.

Shortly after the the gunman locked staff and customers inside the cafe, some were seen with their hands up while others were made to hold a black flag with Arabic writing against a window.

Heavily armed police officers took up positions in the pedestrian area, which was cleared for several blocks.

At about 4pm yesterday, local time, two men ran from a front door of the cafe while a man wearing a Lindt apron came out of a side door. About an hour later two women who worked at the cafe ran from the building.

Hostages were seen pressing a black flag displaying Arabic text against the cafe window soon after police were called to the busy pedestrian thoroughfare.

The text on the flag said: "There is no God but Allah" and "Muhammad is the messenger of God".

Some mosques, synagogues and churches held prayer vigils in Sydney and other Australian cities last night.