News: UPDATE 1-Australian police investigate report man armed with knife in downtown Sydney

(Adds witness comments, news reports, paragraphs 1,)

SYDNEY, Aug 13 (Reuters) - Australian police are investigating unconfirmed reports of an armed man in downtown Sydney, a police spokeswoman said on Tuesday, and witnesses reported seeing an injured man carrying a knife.

Police urged the public to avoid the area around King and Clarence Streets, in the central business district of Australia's largest city, where they were conducting an operation.

Police gave no further information but Seven News said a man was in custody after arming himself with a knife and running through downtown Sydney.

A woman who answered the phone at a Subway store near the scene told Reuter "We saw the person with a knife over there bleeding."

"The cops are here and they blocked the road right now, so we can't go outside. They said: 'It's a crime scene, you can't come out'," said the woman, who declined to give her name.

The Sydney Morning Herald said several people had reportedly been stabbed, although there was no confirmation from officials.

A Sky News reporter and other media reports said the man shouted "shoot me" at police.