A woman trapped in a burning apartment in Sydney's south-west overnight was forced to drop her two-day-old baby and two-year-old toddler out of a second-storey window to save them.

Key points: Mother, 27, dropped newborn and toddler onto sheet held by neighbours

Mother, 27, dropped newborn and toddler onto sheet held by neighbours Firefighters say neighbours' actions saved trio

Firefighters say neighbours' actions saved trio Fire is not being treated as suspicious

The 27-year-old woman broke the window of her Lakemba unit and dropped the children onto a sheet that a group of people were holding.

Neighbour Arshad Mehmood, who caught the baby, said he was in his flat when he heard a big noise and someone yelling for help.

When he went outside he could see smoke and the woman near the window of her flat holding her newborn.

Arshad Mehmood, who caught the baby, speaking to Fire and Rescue Superintendent Adam Dewberry. ( ABC News: Jade Macmillan )

"She was holding the baby saying 'please help, help, help'," he said.

Mr Mehmood and his neighbours then got a bedsheet in which they caught the toddler.

He said the woman then pleaded for them to save the newborn before dropping the child.

"She just dropped it. I knew I just had to catch the baby and it landed it my arms. I wasn't expecting her to do it," he said.

Mr Mehmood said he felt for the woman.

"I don't want to be in her shoes," he said. "I wouldn't want to see any mother in her situation."

Neighbours put several mattresses underneath sheet

Dalila Awachi, who lives next door to the block, said she and her husband were watching TV when they heard something explode.

"My husband went there and asked her to stay until we bring some mattresses and some sheets so she can throw the babies, then we called the ambulance," Mrs Awachi said.

Dalila Awachi said they put down a mattress to help catch the children. ( ABC News: Jade Macmillan )

The blaze started in the kitchen of the second-storey unit on Wangee Road about 9:30pm on Thursday and quickly spread to surrounding units in the building, police said.

Ms Awachi said neighbours quickly worked together to help rescue the children.

"Other guys came to hold the sheets on all sides and they put the mattress down [on the ground], so the kids can't be injured," she said.

Ms Awachi said several mattresses were put underneath the sheet, so the children could have a soft landing, as the mother dropped them down from about six metres above.

"[The mother] was brave. She was very scared, she only came back from the hospital from having her baby yesterday, the baby is two days old," she said.

"She even broke the window to get out."

Mother was very brave, neighbour says

Fire and Rescue New South Wales Superintendent Adam Dewberry said the unit was well alight and the woman was sitting on the window ledge and about to jump off when firefighters arrived.

Neighbour Khaoulah Yahiaoui said it was heartbreaking watching the terrified mother dropping her children onto the sheet. ( ABC News: Jade Macmillan )

"One of the neighbours advised her the fire service was just arriving and asked her to hang on while they got to work and pulled her off," Superintendent Dewberry said.

"Even coming off that second ledge, she could have sustained some serious injuries as well. So it was a really good support network from the neighbours.

"The neighbours did a fantastic job. This could have very well been a very horrific tragedy."

The woman was taken to St George Hospital was scratches, burns and smoke inhalation and the children were not injured.

Ms Awachi's daughter Khaoulah Yahiaoui said it was a frightening situation.

"If the neighbours weren't helping it could have been worse," Ms Yahiaoui said.

She said it was heartbreaking watching the children being dropped onto the sheet as the mother was terrified

"She was scared more about her kids than herself, so she left herself as the last person in danger, I felt so sad for her."

Fire most likely an accident: firefighter

Superintendent Dewberry said heavy black smoke was billowing from the window when firefighters arrived.

"Firefighters extended a line of hose up into the building and started to suppress the fire.

"A second crew actually then used a second line of hose to apply water over that lady to protect her from the hot spoke - smoke and fire that was starting to vent through that room.

"Firefighters then put a ladder up and picked that lady up off the window sill and carried her down to the ground."

He said investigators had examined the scene and determined that the fire was most likely accidental.

"At this stage, the investigation will continue. They've completed the investigation on-site. They will continue throughout the day.

"The kitchen area is an area of interest and through the morning and day we'll progress a little bit more to determine if that is the area where the fire originated.

"The occupants, where it was safe, were allowed to return to the units last night. The fire-affected unit and the unit above are still isolated from the residents returning."

Neighbours could not get in due to deadlock

Superintendent Dewberry said in modern buildings fires could spread in two to three minutes.

"We advise people if they're going to have their doors locked with deadlocks or any locks to leave the keys in the locks.

"The neighbours actually did try to gain access to the unit but they couldn't get in because of the door lock with that."

Neighbour MD Hasan said he tried to break down the door to the unit but could not get in.

"I was sleeping in the unit ... suddenly I heard a big bang and a lady was crying for help," Mr Hasan said.

"Then big, thick, black smoke came out all over the place and people came running from all the units to save their lives.

"The lady was screaming and crying for help, help ... she was just saying the word help."