Two people are in custody after reports of gunshots at Sydney's Bondi Beach, Australian police said on Sunday.

"The police operation is ongoing and we continue to urge people to avoid the area," New South Wales police said in a post on X.

The Sydney Morning Herald said multiple people had been injured, while television networks Sky and ABC aired footage showing people lying on the ground.

"I saw at least 10 people on the ground and blood everywhere," 30-year-old local Harry Wilson, who witnessed the shooting, told the Herald.

Alex Ryvchin, co-chief executive of the Executive Council of Australian Jewry, told Sky News that the shooting happened at an event at the beach celebrating the Jewish festival of Hanukkah, which began at sundown.

"This is the Jewish community at its best coming together to mark a happy occasion. If we were targeted deliberately in this way, it's something of a scale that none of us could have ever fathomed. It's a horrific thing," he said, adding his media adviser had been wounded in the attack.

Videos circulating on X appeared to show people on Bondi Beach scattering as multiple gunshots and police sirens could be heard.

Another video showed two men pressed onto the ground by uniformed police on a small pedestrian bridge. Officers could be seen trying to resuscitate on one of the men, according to Reuters, who said it could not immediately verify the footage.

"We are aware of an active security situation in Bondi. We urge people in the vicinity to follow information from NSW Police," said a spokesperson for Prime Minister Anthony Albanese.

The attack came almost exactly 11 years after a lone gunman took 18 people hostage at the Lindt Cafe in Sydney. Two hostages and the gunman were killed after a 16-hour standoff.

(With input from agencies)