Eight hostages forced to line eight windows

Eight of at least 13 people being held hostage in a Sydney CBD cafe have been forced to line up at each of the cafe's eight windows.

The hostages are being held by an armed man in a white tshirt, jacket and bandana - for more details see ninemsn's main report.

Hostages inside the cafe, on Martin Place, have been forced to hold an Islamic flag against the glass.

The flag has been identified as a Shahada flag and reads, "There is no god worthy of worship except Allah and Muhammad is his messenger".

Although written in Arabic, the flag is not the official emblem of the terrorist insurgent group ISIL.

The Sydney CBD has been largely shut down as a result of the siege, which has seen hundreds of police and onlookers flood the area.