Why wasn't gunman watched?

SYDNEY - The Australian government yesterday pledged to determine why an Iranian-born Islamist with a history of extremism and violence was able to play out a "sick fantasy" by seizing hostages in a day-long siege.

A giant sea of flowers was laid at a makeshift memorial near the scene in the heart of Sydney's financial quarter, where Muslim community leaders joined their fellow citizens in mourning the two victims of Monday's cafe siege.

Prime Minister Tony Abbott conceded that the dead gunman, identified in reports as 50-year-old refugee Man Haron Monis, had evaded greater scrutiny despite being accused of serious crimes.

Last year, Monis was charged as an accessory to the stabbing murder of his former wife, who was set alight in a Sydney apartment block. He was also charged this year with more than 40 counts of sexual or indecent assault against women in Sydney, according to court documents.

He was found guilty in 2012 of sending threatening letters to the families of eight Australian soldiers killed in Afghanistan and sentenced to two years in prison, although he served only a portion of that penalty.

Those charges and the conviction, as well as public statements he had made on his website, have raised questions about whether the authorities should have done more to monitor him.

"Decent, innocent people got caught up in the sick fantasy of a deeply disturbed individual, and we have seen the consequences of this play out over the last 36 hours," Mr Abbott told reporters.

"How can someone who has had such a long and chequered history not be on the appropriate watch lists and how can someone like that be entirely at large in the community?

"These are questions that we need to look at carefully and calmly and methodically, to learn the right lessons and to act upon them. That's what we'll be doing in the days and weeks ahead."

Emotions were raw as Australia struggled with the news that two of the 17 hostages were killed when the 16-hour stand-off reached a dramatic climax in the early hours yesterday, as police commandos stormed the Lindt chocolate cafe, leaving Monis dead as well.

It was not entirely clear how the hostages died, although reports said that cafe manager Tori Johnson, 34, was shot as he tried to wrest a shotgun out of Monis' hands as the man began to doze off at about 2am.

The other victim was mother of three Katrina Dawson, 38. The barrister had tried to shield a pregnant hostage.

Six other hostages were wounded, including three women with gunshot wounds, among them a 75-year-old.

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