The gunman at the centre of the siege at a Sydney cafe was not on a terrorism watchlist, Australia's prime minister has said.
Three people died after the 16-hour siege, which came to a dramatic end just after 2am local time when armed police stormed the building.
One was the 50-year-old "lone gunman", Iranian refugee Man Horan Monis, who was pronounced dead in hospital.
The others have been named as Katrina Dawson, 38, a barrister and mother of two who worked in Sydney's central business district, and Lindt Chocolate Cafe manager Tori Johnson, 34.
Four people were taken to hospital following the siege, including a police officer with facial wounds from gunshot pellets.
Shortly after laying flowers near the scene, prime minister Tony Abbott labelled radical group Islamic State a "death cult" and said there were questions to be answered over why Monis had been was freed on bail.
He said: "This has been an absolutely appalling and ugly incident - that's the only way to describe it. Our hearts go out to the families of Katrina Dawson and Tori Johnson. These were decent ordinary people who were going about their ordinary lives.
"Decent, innocent people who were caught up in the sick fantasy of a deeply disturbed individual."
He added Monis had "certainly had been well known to the Australian Federal Police... but I don't believe that he was on a terror watch list at this time."
Police deputy commissioner Catherine Burn told reporters today the gunman was "unstable".
She said: "He was on bail and in terms of that matter, his movements will form part of the critical investigation.
"He has clearly made some statements. This is a man who had a serious history of offences and a history of violence. A man we do believe had some extremist views and we also believe he was unstable.
"We will clearly have a look at all the things we can find out about him so we can determine what might have triggered anything."
She refused to speculate on the actions of the cafe manager, when asked if he had acted heroically.
"I'm not going to talk about individual actions at all. This will all come out in time but can I just say every single one of the hostages, every single one of those victims was courageous," she added.
Earlier, police commissioner Andrew Scipione told reporters that 17 hostages had been accounted for in total, including five who escaped early in the attack.
He added the Lindt cafe had been secured and no explosive devices were found.
Describing the incident as "isolated", Mr Scipione urged people not to "speculate" about what had happened, adding police believed more lives could have been lost had they not taken action.
"Events that were unfolding inside the premises led them to the belief that now was the time to actually deploy, and they did," he said.
"I understand there were a number of gunshots that were heard, which caused officers to move towards an emergency action plan."
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