‘Business as usual’ ... Prime Minister Tony Abbott Source: Supplied

“We are in this together,” Premier Baird said.

“We are absolutely 100 per cent behind all of the actions our police have taken during this very difficult day.”

MORE BREAK FREE: Hostages escape cafe siege in Sydney

SYDNEY SIEGE: What we know, what we don’t

NSW Premiere Mike Baird and Police Commissioner Andrew Scipione address the media from the NSW Police executive offices. Picture: News Corp/ Melvyn Knipe Source: News Corp Australia

Mr Baird said he spoke to Islamic leaders who told him, “we are all in this together”.

He also said that tomorrow morning everyone should proceed as normal.

There will continue to be an exclusion zone around Martin Place so he advised those who work around that area to work from home.

He said the transport network will operate largely as expected.

“We are doing all we can in these difficult circumstances and we will get through it,” he said.

NSW Police Commissioner Andrew Scipione remained tight lipped on the tactical operations of the police but said, “our number one priority is to get everyone caught in that situation out”.

“We have large numbers of police, they are in contact and we are working to resolve this as quickly as we can.”

He said they believe no-one still trapped inside is injured.

Mr Scipione thanked everyone in the public and had a message for those trapped inside.

“Rest assured we are doing all we can to set you free.”

Speaking later in the day, Prime Minister Tony Abbott said that it has been a testing day for Australian's.

Prime Minister Tony Abbott spoke again about the Sydney hostage drama, describing it as “a difficult day”.

He chaired a meeting of the National Security Committee of the Cabinet which was briefed by Premier Mike Baird and NSW Police Commissioner Andrew Scipione on the unfolding situation.

“This is a very disturbing incident. It is profoundly shocking that innocent people should be held hostage by an armed person claiming political motivation,” Mr Abbott said.

“NSW police and other agencies have responded to this incident with great professionalism.

PM Tony Abbott says motivations are unknown, but there are indications that the Sydney siege could be politically motivated.

“Throughout the day there has been nothing but complete and total co-operation between different governments and different agencies. You can be proud of the way your police and security bodies have responded to the events of this day.”

He the went on to praise the people of Sydney for their calm reaction to this incident.

“Yes it is a day that has tested us, (but) we have risen to the challenge,” he said.

Mr Abbott said he had also received messages of support from other world leaders during the day.

In an earlier press conference, Mr Abbott said it was not yet “known whether this is politically motivated” but admitted it looks to be.

“The whole point of politically motivated violence is to scare people out of being themselves,” he said. “Australia is a peaceful, open, and generous society. Nothing should ever change that.

Opposition leader Bill Shorten says Australians are shocked but will not be shaken by the dramatic hostage situation in a Sydney cafe.

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

“There are people who would wish to do us harm.

“I can understand the concerns and anxieties of the Australian people at a time like this but our thoughts and prayers must above all go out to the individuals who are caught up in this.

“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 encouraged Australians to report any suspicious behaviour — but to still go about their days.

“I would urge all Australians to go about their business as usual,” he said.

“This is a very disturbing incident.”

Opposition Leader Bill Shorten described today is an “an incredibly difficult day for Sydney and Australia”.

City on lockdown ... A police officer with gun drawn in the Sydney CBD. Source: News Corp Australia

“Australians are shocked but we won’t be shaken,” Mr Shorten said from Melbourne.

“We face moments like this with resolute spirit.

“At times like this, it’s more critical than ever that the Australian community be solid, stick together, be united.”

Mr Shorten said he spoke to the Prime Minister about 11am.

“I reiterate the Opposition’s complete support for the Government at this most difficult time and, again, I commend our law enforcement agencies for the work they are doing.”

The government’s National Security Committee of Cabinet met for briefings on the siege earlier this morning.

In a statement, Prime Minister Tony Abbott said he has also spoken with NSW Premier Mike Baird and “offered him all possible Commonwealth support and assistance”.

Heart of the city ... The Lindt Cafe is in the centre of Sydney’s busy financial district. Source: News Corp Australia

“This is obviously a deeply concerning incident but all Australians should be reassured that our law enforcement and security agencies are well trained and equipped and are responding in a thorough and professional manner,” the Prime Minister said.

Opposition Leader Bill Shorten said his thoughts and prayers are with the “innocent people” caught up in the Martin Place incident.

“Our thoughts are also with their families who are seeing this incredibly distressing situation unfold, along with the rest of Australia,” the Opposition Leader added in a statement.

“I have full confidence in the skill and professionalism of our police and security agencies.

“I have spoken to Prime Minister Tony Abbott this morning and offered him the Opposition’s full support at this time.

“Australians can be assured that we are one when it comes to keeping Australians safe.”

Terror beamed across the world ... This Islamic flag was held up against the cafe window by a hostage as Seven’s The Morning Show was broadcast across the road. Source: Supplied