In a dramatic development in Sydney’s north-west, police have confiscated a live grenade as they probe a shooting incident that occurred while two residents were present in their home.

Authorities also collected a sledgehammer, a firearm, and a vehicle during their investigation.

Emergency responders were dispatched to Loura Street in Tallawong around 4:40 a.m. following reports of gunfire.

According to police accounts, two unidentified suspects attempted to breach the residence using a sledgehammer but left the scene, only to return shortly thereafter.

The assailants reportedly fired several rounds into the dwelling before fleeing in a Mazda.

Fortunately, the two individuals inside were unharmed during the ordeal.

The Mazda was stopped on Ashburton Street in Tallawong.

Two people were seen running from the vehicle.

A crime scene has been established as investigations continue.

Police searched the vehicle, where they located a live grenade, two firearms, a magazine, a mobile phone, bleach and clothing.

Gloves, balaclavas and hoodies were later found at a nearby parklands. 

Officers from the Rescue and Bomb Disposal Unit and Australian Defence Force personnel attended to safely remove the live grenade.

Anyone with information is urged to contact local police or Crime Stoppers on 1800 333 000.