The UK Prime Minister is "deeply concerned" over the unfolding hostage stand-off in Sydney while other world leaders called the situation "disturbing".

At least one armed gunman has taken up to 40 people against their will in a Lindt cafe in Martin Place – one of the city's main business areas.

A major police operation is underway and the area surrounding the café has been cordoned off.

"I was briefed overnight on the siege in Sydney. It's deeply concerning and my thoughts are with all those caught up in it," David Cameron said.

The Prime Minister of India also shared his worries over the situation.

"The incident in Sydney is disturbing. Such acts are inhuman and deeply unfortunate. I pray for everyone's safety," Narendra Modi said.

New South Wales police have confirmed that five hostages have been released from the café.

Tony Abbott, the Prime Minister of Australia, described the incident as "terrifying" and said he does not know if the attack is "politically motivated".

"We don't yet know the motivation of the perpetrator. We don't know whether this is politically motivated though obviously there are some indications that it could be," Abbott said.

"We have to appreciate that even in a society such as ours, there are people who would wish to do us harm, that's why we have police and security organisations of the utmost professionalism that are ready and able to respond to a whole range of situations and contingencies, including this situation that we are now seeing in Sydney."

Deputy Police Commissioner Catherine Burns said that New South Wales police have been in contact with the hostage taker throughout the day in "various forms".

"We have been in contact throughout the day in various forms and it's an important part of our negotiation that we do not talk about some of the tactics or information that is being passed but this is a very, very well-tested system of negotiation that we use, it is world class and it might take a little bit of time but safety of those people inside is what is paramount," Burns said.