MELBOURNE - Australian firefighters raced on Sunday to contain widespread bush fires that have left three people dead, and warned of "catastrophic" fire conditions ahead, including around the country's biggest city of Sydney.

Fires have killed three people and razed more than 150 homes since Friday, but cooler weather overnight provided a welcome reprieve for firefighters and residents.

Authorities were assessing the damage on Sunday, with more than 100 fires still burning across the states of New South Wales and Queensland, including several blazes that remained out of control.

Wider swaths of the states - including greater Sydney - are now bracing for perilous fire conditions predicted for the coming days, as is Western Australia state.

Authorities upgraded the forecast for the greater Sydney region to catastrophic fire danger on Tuesday, the first time the city has been rated at that level since new fire danger ratings were introduced in 2009.

Massive fires tore through several towns on Friday and Saturday.

The mayor of Glen Innes, where two people died, said residents were traumatized and still coming to terms with their losses.

"The fire was as high as six meters and raging with 80 kilometers-anhour winds," Carol Sparks told national broadcaster ABC.

Five people reported missing have since been found, but the unpredictable nature of the disaster means officials have not ruled out the possibility that others could still be missing, said NSW Rural Fire Service spokesman Greg Allan.

In Old Bar, which was spared the worst when the wind changed direction, hectares of bushland had turned to charcoal and small pockets of flames continued to smolder.

Peter McKellar, 75, was clearing debris from his property as his neighbor's home sat in ruins.

"The firies (firefighters) saved ours," he said. "They are doing a wonderful job. They're angels."

High temperatures, low humidity and strong winds forecast from the middle of the week are predicted to fuel blazes that authorities have warned they will be unable to contain ahead of time.

"We are ramping up for probably another 50 trucks full of crews to be deployed into New South Wales on Monday night ahead of conditions on Tuesday," NSW Rural Fire Service Commissioner Shan Fitzsimmons told reporters in Taree, one of the worst-hit areas.

"We have seen the gravity of the situation unfold. ... What we can expect is those sorts of conditions to prevail across a much broader geographic area as we head into Tuesday."

With thousands of people forced to flee their homes, Australia's government was offering immediate emergency assistance payments of up to A$1,000($685) to those affected and extended financial support for anyone unable to work as a result.

Agencies