ROUGH CUT (NO REPORTER NARRATION)<br/> <br />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 (December 15), raising fears of an attack linked to Islamic militants.<br/> <br />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.<br/> <br />Part of Martin Place, home to the Reserve Bank of Australia, commercial banks and close to the New South Wales (NSW) state parliament, was closed off by armed police.<br/> <br />Live television footage showed patrons inside a cafe standing with their hands pressed against the windows. A black and white flag similar to those used by Islamic State militants in Iraq and Syria was also visible.<br/> <br />NSW Police tweeted: "A police operation is underway in Martin Place, Sydney's central
