Greater Sydney faces 'catastrophic' bushfire threat

For the first time ever, Australia's largest city and the surrounding area faced the highest level of fire warning -- with authorities cautioning that "lives and homes will be at risk".

"There is nothing built or designed to withstand the sorts of conditions that you can expect under catastrophic" conditions, said Shane Fitzsimmons, commissioner of the rural fire service for New South Wales state, which encompasses Sydney.

High temperatures and strong winds are expected to create tinderbox conditions Tuesday, prompting New South Wales Premier Gladys Berejiklian to decare the seven-day state of emergency.

Three people have already died, thousands have been displaced and 150 homes have been destroyed by dozens of out-of-control blazes in the north of the state.

Conditions eased on Monday and some residents were able to return home, although a haze lingered over many fire-hit regions.

But winds and temperatures are expected to pick up again on Tuesday.

The Blue Mountains to Sydney's west and the wine-producing Hunter Valley are expected to be the hardest hit.

There, total fire bans are being put in place and residents are being warned to avoid bushland.

"Tomorrow is about protecting life, protecting property and ensuring everybody is safe as possible," said Berejiklian.

Months of drought have sapped moisture from the earth and vegetation across much of eastern Australia, creating dangerous conditions for the outbreak and spread of wildfires.

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