SYDNEY, Dec. 15 -- Police closed down central Sydney on Monday after armed men took up to 40 hostages at a busy cafe.

The hostages have been forced to hold a black and white Islamic flag on the cafe window.

A police media spokeswoman confirmed that officers are attending the scene and an operation was underway surrounding the Lindt Chocolate cafe.

Lindt Australia CEO Steve Loane told news.com.au that he believes there are 40 to 50 people inside the cafe, including customers and staff.

According to local radio, the gunman have told police negotiators that they have planted "devices" all around Sydney and demanded to talk to Prime Minister Tony Abbott.

Staff in shop aprons can be seen with their hands on the windows. There are also reports that there is more than one gunman.

All trains are shutdown near the area. Police officers have guns drawn outside the cafe.

Police have also evacuated the Sydney Opera House.

Fairfax Media reported that the Australian government has convened a meeting of the National Security Committee this morning. It has been warning for months that a terror attack in Australia could happen.

Abbott said after the September terror raids that all that is required for a domestic Islamic State ordered terror attack is a " knife, iPhone and a victim".