Deadly Sydney blast thought suspicious

A body has been found and rescuers concede hopes are fading for the other two people believed trapped in the rubble of a Sydney building destroyed in an explosion.

Three residents of the building, Bianka O'Brien, her 12-month-old son Jude and 30-year-old neighbour Chris Noble were missing after the convenience store in Rozelle was razed by the explosion and fire about 4am on Thursday morning.

The body was discovered at 4.30pm, but had not been identified and its gender was not known.

Three hours later, police said the body could not be retrieved because the site was still too unsafe.

While remaining optimistic the other two people had survived, NSW Fire and Rescue Superintendent Paul Johnstone acknowledged that hope of finding someone alive was fading.

"We are picking through brick by brick," Supt Johnstone said.

"We still hold out hope that someone underneath may be alive. We're treating it as a rescue still.

"Though as the hours tick by, it's looking quite dire. It's a pretty horrific scene."

He said the building had completely collapsed and the structures beside it were unstable.

The explosion is being treated as suspicious.

"At this stage, it's an arson," said Inspector Clive Ainley, the commander of the Leichhardt local area command.

"It's too early to speculate whether it's a homicide."

Police are reviewing CCTV footage of the blaze and investigators are looking into reports of a car fleeing the area after the explosion.

Two people jumped from the first floor of the burning building, while a convenience store employee was found buried under rubble and a commercial fridge.

Fire fighters had to use their hands to dig out the man who was taken to hospital in intensive care.

A witness told AAP he saw the two men yelling for Mr Noble.

Ms O'Brien and baby Jude lived in a separate unit above the store.

Her distraught husband John, who wasn't home when the unit was swallowed by fire, arrived at the scene on Thursday morning, and was being comforted by friends.

Shocked friends are holding out hope the 31-year-old hairdresser will be found alive.

"She is an absolutely gorgeous person," one friend told AAP.

Anthony Carroll, who lived in a neighbouring unit, fled his smoke-filled home with only the clothes on his back.

"I just grabbed what I've got on and got out of there," he said.

"There were people screaming and yelling and people trapped in the place next door, so it was pandemonium."

Like authorities, Mr Carroll wondered what started the blaze.

"It was convenience store, what is in a convenience store that causes that much of an explosion?" he said.

It took several hours for firefighters to render the smouldering building site safe enough to allow search and rescue teams in.

Search dogs and cameras scoured the charred debris.

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