Police attended a home in Edensor Park around 1:30am on Tuesday after two men armed with guns were seen attempting to break into the property in what was "quite possibly" an attempted hit.
Units were deployed to the area as the home was believed to be connected with organised crime groups, NSW Police deputy commissioner Peter Thurtell said.
Heavily armed police have been involved in an incident in Sydney in which officers were shot at. (HANDOUT/ABC NEWS)
The "logical reason" for the two gunmen to be lurking outside the home with firearms was because they were intending to kill those who lived inside, Mr Thurtell said.
"It is concerning to police that somebody so brazenly armed with a firearm would go up to the front door of a residential premises," he told reporters.
"The residents of that premises were fortunate not to be home at the time."
Mr Thurtell said the gunmen fled in a Hyundai sedan before a police pursuit began along Cowpasture Road, Hinchinbrook.
After fears for public safety due to dangerous driving police abandoned the initial chase before again following the car down St James Road in Varroville.
During the pursuit a passenger leaned out of a front window and fired multiple times, with two shots hitting the police vehicle but not injuring anyone.
The car was brought to a halt by road spikes before police said they seized one long-arm rifle and two handguns.
Mr Thurtell said the 20-year-old driver was arrested in relation to the shooting but the passenger, who is alleged to have fired the shots, fled on foot and has not yet been arrested.
"One of the firearms located in the vehicle is believed to be the firearm that shot at the police officers and the police vehicle," he said.
One man involved in the incident remains on the run. (Mick Tsikas/AAP PHOTOS)
Mr Thurtell said the incident was a "very dangerous situation" that risked the lives of officers.
"The dog squad officer is fortunate not to be injured but is also very lucky that those projectiles didn't hit him or his dog," he said.
"With the affiliations of the resident at the premise, we can only suspect that it's gang related."
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