UPDATE 7am AEDT

A manhunt is underway for a gunman who opened fire on New Year revellers at an Istanbul nightclub, killing at least 39 people, including as many as 24 foreigners.

Some people jumped into the adjacent Bosphorus waterway to save themselves after the attacker began shooting at random in the Reina nightclub just over an hour into the new year on Sunday.

Witnesses described diving under tables as the assailant walked around spraying bullets from an automatic rifle.

The attack shook NATO member Turkey as it tries to recover from a failed July coup and a series of deadly bombings in cities including Istanbul and the capital Ankara, some blamed on Islamic State and others claimed by Kurdish militants.

“At first we thought some men were fighting with each other,” said a Lebanese woman called Hadeel who was in the club with her husband and a friend. “Then we heard the sound of the gunfire and ducked under the tables.

We heard the guy screaming Allahu Akbar (God is Greatest), all three of us heard that … We heard his footsteps crushing the broken glass,” she told Reuters. “We got out through the kitchen, there was blood everywhere and bodies.”

Officials spoke of a single attacker but some reports citing witnesses including on social media suggested there may have been several.

A massive security operation unfolded to track down the fugitive assailant or assailants and any conspirators.

Nationals of Saudi Arabia, Morocco, Lebanon, Libya, Israel, a Turkish-Belgian dual citizen and a Franco-Tunisian woman were among those killed, officials said. Saudi newspaper al-Riyadh said five of the dead were from Saudi Arabia.

France said three of its citizens were wounded.

Turkish Interior Minister Suleyman Soylu said 15 or 16 of those killed at Reina were foreigners but only 21 bodies had so far been identified. He told reporters 69 people were in hospital, four of them in critical condition.

However, a later report has put the number of foreigners killed at 24, from 10 countries.

EARLIER

At least 39 people have been killed and almost 70 wounded in a terrorist attack on an Istanbul nightclub during New Year’s Eve celebrations.

City Governor Vasip Sahin said one of those killed was a police officer, and said the attack was carried out by one person, after initial reports suggested there may have been two.

The attacker was believed to have entered the Reina nightclub in Istanbul’s Ortakoy district.

The Australian government advised on its Smart Traveller website that travellers should “exercise a high degree of caution” in Turkey and to reconsider their need to travel to Ankara and Istanbul.

Gunman is said to be at large. Photo: AAP

The gunman shot at police officers outside the nightclub before entering and opening fire at random inside the building, where around 500-600 people were celebrating the New Year.

“A terrorist with a long-range weapon… brutally and savagely carried out this incident by firing bullets on innocent people who were there solely to celebrate the New Year and have fun,” Mr Sahin told reporters at the scene.

Turkish Interior Minister Suleyman Soylu said the attacker was still at large and 69 people were being treated in hospitals following the shooting.

At least 16 of the dead were foreign nationals, Mr Soylu said, without providing information on their nationalities.

President Tayyip Erdogan said that Turkey would fight to the end against all forms of attack by terror groups and their backers.

“As a nation, we will fight to the end against not just the armed attacks of terror groups and the forces behind them, but also against their economic, political and social attacks,” he said in a statement.

“They are trying to create chaos, demoralise our people, and destabilise our country with abominable attacks which target civilians … we will retain our cool-headedness as a nation, standing more closely together, and we will never give ground to such dirty games.”

Witness Sinem Uyanik, whose husband Lutfu Uyanik was wounded in the attack, told AP she saw several bodies inside the nightclub.

“Before I could understand what was happening, my husband fell on top me,” she said outside Istanbul’s Sisli Hospital.

Partygoers leapt into the water to avoid the gunman. Photo: ABC

“I had to lift several bodies from on top of me before I could get out.”

Footage from the scene showed at least six ambulances with flashing lights and civilians being escorted out.

Broadcaster CNN Turk initially said the attacker was thought still to be inside the building and that police special forces were preparing to raid it.

CCTV footage has also emerged from inside the nightclub, allegedly showing the gunman in a jacket and Santa hat.

Turkish journalist Ürün Dirier tweeted what is reportedly CCTV from inside the club.

Reina'daki silahlı saldırganlardan ilk görüntüler. Yaralı sayısı 50 deniyor. pic.twitter.com/XWU2Pswnto

— Ürün Dirier (@DirierUrun) December 31, 2016

A photographer said police cordoned off the area about three kilometres away from the nightclub and reported multiple ambulances passing by.

The nightclub lies on the European side of the Bosphorus Strait which divides Istanbul in two.

Some revellers had jumped into the water to escape the gunfire and were being rescued by police, NTV said.

https://youtu.be/XmwwKHlG3iQ

Security measures had been heightened in major Turkish cities, with police barring traffic leading up to key squares in Istanbul and the capital Ankara.

In Istanbul, 17,000 police officers were put on duty, some camouflaged as Santa Claus and others as street vendors.

Ankara and Istanbul have been targeted by several attacks in 2016 carried out by the Islamic State group or Kurdish rebels, killing more than 180 people.

Turkey’s terrorism toll over 12 months

December 10, 2016: Two explosions tear through the Istanbul suburb of Besiktas at the conclusion of a soccer match. Forty-four people are confirmed dead, including 36 police officers. The attack is claimed by a hardline group called the Kurdistan Freedom Falcons (TAK).

Media approach grief-stricken families outside the nightclub. Photo: Getty

November 24: At least two people are killed and 33 are wounded in a car bombing outside the regional governor’s office in Adana in southern Turkey.

November 4: At least eight people are killed in the Kurdish-majority city of Diyarbakir in a car-bomb attack that comes hours after the arrests of pro-Kurdish legislators.

October 16: A suspected Islamic State suicide bomber kills himself and three security officers in an explosion during a police raid in the south-eastern Turkish city of Gaziantep. A second suicide bomber later blows himself up in a raid on a house in the Burak district of the city.

Friends and family gather to mourn loved ones. Photo: Getty

August 21: A bomb at an outdoor wedding ceremony, also in Gaziantep, kills at least 54 people according to local media. Twenty-nine of the dead are children.

August 17 and August 18: Three bomb attacks targeting Turkish police and the army hit the provinces of Elazig, Van and Bitlis, killing 12 people. More than 200 people are injured. Turkish Prime Minister Binali Yildirim says that the banned Kurdistan Workers’ Party (PKK) is responsible for the attack.

June 28: A suicide bomb attack on the international terminal of Ataturk airport in Istanbul leaves 45 people dead. The Turkish government blames Islamic State for the attack, and arrests dozens of suspects.

June 11: A car bomb kills twelve people in central Istanbul in an attack for which TAK claims responsibility.

March 19: A suicide bomber blows himself up in Istanbul’s central shopping district, killing four people and injuring 39 others. According to the Turkish government, the attacker had links to IS. The group does not claim the attack.

March 13: Thirty-seven people are killed in a car bombing in Ankara. The TAK claim responsibility.

February 17: Thirty people, including the suicide bomber, die in an attack on a military convoy in Ankara. The TAK also claim responsibility, the government blames the PKK.

January 12: Twelve Germans are killed in an attack on the historic centre of Istanbul near the Hagia Sophia mosque. According to the Turkish government the suicide bomber was a member of IS.

-with ABC, AAP