Just after 3.50am police were called to a home on Park Avenue to reports a 24-year-old woman was being held captive at the property.

She managed to escape and contacted police who raced to establish a perimeter around the property, calling in negotiators and the dog squad.

On arrival at the scene police were informed that a woman in her 30s and two men, believed to be 29 and 36, were inside the house. They had entered the property of an elderly gentleman who was asleep at the time and threatened him.

Police were able to facilitate the elderly man's escape. He was uninjured and taken into police care.

Shortly afterwards the 36-year-old man attempted to flee the scene on foot but was arrested a short time later on Howell Street. He was taken to Waratah police station and is assisting with enquiries. The 30-year-old woman was arrested a short time later and was transferred to Newcastle police station.

The second man involved in the incident managed to escape the home and remains on the run.

A police investigation has been launched into the circumstances surrounding the incident, including allegations that the 24-year-old woman had been held against her will for several days prior to the police operation on Wednesday.

Anyone with any information with may assist investigators is urged to contact police or Crime Stoppers on 1800 333 000.

Newcastle Herald will have a detailed report and coverage of the press conference later today.

This update marks the end of our live coverage from the scene.

UPDATE 10.30AM: While police wrap-up the operation at a home on Park Avenue Kotara, a truck attempting to circumnavigate the road closures has become stuck on a tree branch and is causing even more traffic mayhem in the area.

The truck is stuck at the intersection of Joslin and Seaview streets right in front of the police blockade. Traffic has already started queuing in the area, expect delays and avoid the area if possible.

Police are expected to hold a press conference about midday to release details of the large-scale operation on Wednesday.

UPDATE 10AM: The police operation continues, focusing on a single property on Park Avenue, Kotara.

Police are expected to release a formal statement about the operation shortly. The Herald cannot reveal any further details at this stage, but will have a full report later today.

UPDATE 9AM: Police remain outside a property on Park Avenue Kotara in an 'operation' that has shut down several streets across the suburb.

Residents first reported police and armoured vans streaming into streets around Kotara train station from 5am Wednesday.

According to reports from the scene police were initially chasing at least one person who was seen darting in and out of yards and jumping fences.

While no official details have been released by NSW Police, it is understood the operation now focuses on a single property, rather than a suburb-wide sweep of the area.

People have been asked to avoid the area and residents have been directed to stay inside and lock their doors.

Parents from Kotara South Public School have been asked to accompany their children to the school gate - the school will remain open.

"There are some changes in traffic conditions this morning and police presence in the Kotara area. Children should be with an adult this morning when walking to school if at all possible," a message from the school said.

"Please stay indoors if you are in the affected areas. Being safe and allowing the Police to do their work is the priority."

Kotara High School is also fully operational.

More to come.

UPDATE 8.15AM: Police have surrounded a house in Kotara and have been heard on the megaphone asking for people inside the property to exit the house.

Surrounding residents remain locked inside their homes and streets remain closed.

EARLIER: POLICE have shutdown several streets in Kotara for an 'operation'.

Residents said they have seen several police units, including the armoured vehicle, move into the area.

Residents have been told to stay inside and lock doors and if they leave the street they cannot return.

A number of streets are closed in and around Park Avenue.

IN THE NEWS:

Police have asked pedestrians and motorists to avoid the area. The intersections, closures are changing based on the operation. At this stage cross streets of Seaview, Joslin and nearby streets are closed.

No further information has been released at this time.

"Newcastle Police are involved in a ongoing operation," a statement said.

More details to come.

Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: