A hostage runs towards a police officer outside Lindt cafe in central Sydney yesterday. Photo: Reuters

Heavily armed Australian police stormed a Sydney cafe yesterday and freed a number of hostages being held there at gunpoint, in a dramatic end to a 16-hour siege in which three people were killed and four wounded.

New South Wales police said two men, aged 34 and 50, and a 38-year-old woman died. The attacker was among the fatalities.

Heavy gunfire and blasts from stun grenades filled the air shortly after 2am local time.

Moments earlier at least six people believed to have been held captive managed to flee after gunshots were heard coming from the cafe, and police later confirmed that they made their move in response. 17 hostages were accounted for.

Medics tried to resuscitate at least one person after the raid and took away several wounded people on stretchers, said a Reuters witness at the scene in downtown Sydney. Bomb squad members moved in to search for explosives, but none were found.

The operation began shortly after a police source named the gunman as Man Haron Monis, an Iranian refugee and self-styled sheikh facing multiple charges of sexual assault as well as being an accessory to murder.

Attacker was Iranian refugee facing multiple charges of sexual assault

He was also found guilty in 2012 of sending offensive and threatening letters to families of eight Australian soldiers killed in Afghanistan, as a protest against Australia’s involvement in the conflict, according to local media reports.

A US security official said the US government was being advised by Australia that there was no sign at this stage that the gunman was connected to known terrorist organisations.

Although the hostage taker was known to the authorities, security experts said preventing attacks by people acting alone could be difficult.

Iranian refugee and hostage taker, Man Haron Monis, in a still image taken from undated file footage. Photo: Reuters/ ABC via Reuters TV

“Today’s crisis throws into sharp relief the dangers of lone wolf terrorism,” said Cornell University law professor Jens David Ohlin, speaking in New York.

“There are two areas of concern. The first is ISIS (Islamic State) fighters with foreign ­passports who return to their home countries to commit acts of terrorism.

“The second is ISIS sympathisers radicalised on the internet who take it upon themselves to commit terrorist attacks to fulfil their radical ideology.

“We are entering a new phase of terrorism that is far more dangerous, and more difficult to defeat, than al-Qaeda ever was.”