The moment a NSW policewoman realised innocent bystanders were caught in a shootout.

Police are investigating the shooting of four people at a Sydney shopping centre yesterday, which brought down an knife-wielding man but left three innocent bystanders with gunshot wounds.

A video of the incident showing 23-year-old Jerry Sourian running at a female police officer, kitchen knife in hand, before being taken down by police at Hornsby Westfield has been widely circulated.

A second video, obtained by Nine News Sydney (featured above), shows the emotional moment the same police officer realises innocent shoppers were injured in the shoot out.

Jerry Sourian lunges at a police officer. Source: Nine News

In the smartphone footage, the officer can be heard apologising to bystanders after the shocking realisation some had been hit by police bullets.

Blood can be seen flowing from a woman's leg as the officer rushes over  to her.

"Oh sh*t, I’m so sorry. I’m so sorry," she can be heard saying.

Three elderly women suffered serious gunshot wounds in the incident, which occurred just before midday yesterday.

A NSW Police Assistant Commissioner Denis Clifford said police had a matter of seconds to make a decision in "life and death circumstances."

"The officers have fired shots at the offender, he was wounded several times —­ ­unfortunately some bystanders were also injured with other bullet or fragment wounds," Mr Clifford said.

"If a Taser was available a decision was made by those officers in a life and death situation"

Sourian had been seen wandering outside the centre looking "drug-induced and depressed" and babbling incoherently” just before the drama unfolded, according to Nine News.

It's since been revealed he had gone missing from Hornsby Hospital psychiatric ward two weeks ago.