Video shows terrifying moment knife-wielding Perth man took deli worker hostage

The terrifying moment a man held a woman hostage with a knife in the middle of a suburban Perth street before being shot dead by police was caught on camera.

Mobile phone camera footage obtained by 9NEWS showed Brendan John Lindsay, 38, clutching a 37-year-old woman in a headlock while holding a knife to her throat outside a deli in Carlisle on Saturday.

Police shot him several times after attempts to negotiate failed.

The 37-year-old woman, a part-time worker at the deli known to locals as Sheila, was also shot and was taken to Royal Perth Hospital for what are understood to be injuries to her leg.

She in a serious but stable condition.

Sheila could be heard desperately screaming for help in the amateur video of the ordeal.

"Let me go! Let me go, please!" she says.

Police were also heard attempting to defuse the situation.

"Tell me what you want and I'm going to try to sort it out. I'm going to try and sort it out. Relax, tell me what you need," an officer is heard saying.

The stand-off ended in gunfire when Lindsay began stabbing his hostage.

The hostage drama was reportedly sparked when Lindsay and his father had an argument inside the deli.

The shop assistant asked the men to leave the store and Lindsay became angry, dragging Sheila out to the middle of the road.

Lindsay's father told 9NEWS he felt "incredibly sorry" for the woman that was hurt, saying that his son had ongoing problems which he believes were related to drug abuse.

All of the officers involved will receive counselling.