UPDATE: EXPERTS remain divided on whether last year's Sydney siege should be defined as an act of terrorism or the actions of a mentally ill man operating on his own.
Counsel assisting the coroner Sophie Callan said there were clear links to terrorism but Monis appeared to have had no contact with Islamic State despite his interest in the terror group.
"Whether Mr Monis was a terrorist or not, he made use of terrorist threats, garb and language," she said.
"He claimed the planting of bombs in a co-ordinated effort…"
The inquest heard Monis wrote a post in Arabic on his website in which he pledged his allegiance to Islamic State caliph Abu Bakr al-Baghdadi four weeks before the siege.
The extremist Sunni Muslim group claims Al-Baghdadi is the successor of the prophet Mohammad.
"But Mr Monis had otherwise shown no other interest in the political, religious or territorial goals of Islamic State," Ms Callan said.
Monis chose the location of the siege carefully to be near the Martin Place studios of Channel 7, with which he had several dealings in his past.
The violence was "designed to have far-reaching psychological repercussions beyond the immediate targets or victims", Ms Callan said.
The inquiry also heard Monis left his home country Iran amid accusations of embezzlement when he had worked as a pseudo-travel agent for Iranians looking to migrate overseas.
His job was to arrange visas, travel and start-up costs for their new lives.
He was believed to have stolen about $550,000 when he came to Australia.
His first wife, still in Iran, was said to have believed he had "brought shame to the family".
2:00 PM Siege inquest: huge 'grey market' of unregistered weapons
THE gun Man Haron Monis used during the Lindt Cafe siege was from a huge "grey market" of unregistered weapons that were never handed back to authorities after the Port Arthur massacre.
Counsel assisting the coroner Jeremy Gormly said the sawn-off pump action repeating shotgun was "almost certainly" imported.
He estimated 250,000 unregistered grey market weapons still existed in Australia.
Mr Gormly showed an image comparing an image of Monis's firearm to one of the same model that had not been sawn down for easier concealment.
The gun's original owner remains a mystery.
The decision to grant the gunman bail was also probed, with Mr Gormly saying the 37 sexual assault and accessory to murder charges against Monis were handled under NSW law, while charges over his offensive letters to families of slain Australian soldiers came under the federal system.
"There was an absence of information arising from problems of information flowing across jurisdictional boundaries," Mr Gormly said.
"It may be what happened here is one of the prices we pay in our system for having eight (federal and state) systems."
State Coroner Michael Barnes said it was unfair to blame prosecutors for Monis being granted bail.
"Whatever the outcome of that (bail conditions) review, it is important to acknowledge that it is being given with the benefit of hindsight," he said.
"None of those involved in the bail applications could have been expected to foresee something as terrible as the Lindt Cafe siege."
Mr Gormly said bail conditions always had, and always would, create controversy.
But he said it was a cornerstone of the developed world's justice systems and to do away with it would be inconceivable.
"We ought not lose sight of the fact that it was Mr Monis who decided to enter the Lindt Cafe with a hidden gun and stage the siege," he said.
Detective senior constable Denise Vavayis has been called to the witness stand to give evidence about a letter she wrote to the Director of Public Prosecutions, calling for an appeal to Monis's on sexual assault charges.
11:08 AM 1000hrs of CCTV reviewed ahead of Sydney Siege inquest
INVESTIGATORS have reviewed more than 1000 hours of for CCTV footage in the lead up to today's coronial inquest into the Lindt Cafe siege last year.
NSW Coroner Michael Barnes said a "mountain of evidence" had to be analysed to determine what events led to the deaths of Tori Johnson, Katrina Dawson and gunman Man Haron Monis.
It included more than 200 hours of media footage, 1100 still photographs, 1500 phone calls to the national security hotline and 1700 to the police information and enquiry centre.
Forensics experts including bomb technicians, blood spatter and DNA analysts and ballistics experts have spent more than 1000 hours doing their own reviews.
Mr Barnes said the police probe was far from finished.
"It would be a mistake for anyone to assume that this hearing indicates that the police investigation is completed," he said.
Counsel assisting Jeremy Gormly is now delivering a 90-minute opening address.
EARLIER: Coroner to ask why Lindt Cafe gunman Man Monis was on bail
NSW Coroner Michael Barnes will investigate how Lindt Cafe gunman Man Haron Monis was granted bail when he killed two people in Sydney's Martin Place last year.
The inquest will resume from 10am today to examine the events leading to the deaths of Tori Johnson, Katrina Dawson and Monis in December.
A Director of Public Prosecutions attempt to have Monis' bail excluded from the inquest was overruled in June.
Another effort to have portions of witness statements prepared by police and other sensitive documents excluded from the inquest also failed.
Monis was on bail for an accessory to murder charge, as well as 37 sexual assault charges, when he took his hostages in the cafe.
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