Australian siege: Terrorist suspect holds hostages in Sydney cafe, Islamic flag seen in window

SYDNEY: Hostages were being held inside a central Sydney cafe where a black flag with white Arabic writing could be seen in the window, local television showed on Monday, raising fears of an attack linked to Islamic militants.

Australia, which is backing the United States and its escalating action against Islamic State in Syria and Iraq, is on high alert for attacks by radicalized Muslims or by home-grown fighters returning from fighting in the Middle East.