NSW Police operation underway at Dulwich Hill in Sydney's inner west after gunman reports

NSW Police riot squad officers at the scene this morning. ( Supplied )

Police say members of the public were threatened by a man armed with a shotgun in Sydney's inner west, but no shots were fired.

The man set a van alight before fleeing down the street in Dulwich Hill, police were told.

NSW Police lifted the exclusion zone in the area about 2pm as the search for the man continues.

Link copied Share Share article Police are searching for a gunman who fled after threatening members of the public and setting fire to a van in Sydney's inner west.

Riot squad officers, officers in bulletproof vests and the PolAir helicopter responded to the incident near Williams Parade in Dulwich Hill.

A witness has told the ABC that a number of ambulances arrived at the scene and another said nearby residents had been told to stay indoors.