Alleged terrorism plotter Omarjan Azari was urged to "pick a random unbeliever" and kill him or her, and then film the body next to an ISIS flag, a court has heard.
Azari, 22, was denied bail on Tuesday after Sydney's Central Local Court was read extracts of a conversation between him and Islamic State member Mohammad Baryalei, during which it's alleged they discussed a plot to kill random members of the public.
"Just pick a random unbeliever," Baryalei is alleged to have said.
"What you guys need to do is pick any unbeliever.
"Finish him, finish her, put the flag of the state in the background."
The court heard Azari was instructed to choose backpackers or tourists from America, France or Britain as "that would be better".
The crown alleged Azari was heard in the conversation to agree multiple times.
"It's evidence of an agreement ... and the particular manner agreed," crown prosecutor Peter Neil SC said.
He said there was strong evidence either Azari by himself, or with others, was planning to randomly pick someone and "kill them, cover them with the Islamic State flag, film it and send it to Mr Baryalei".
In denying bail, Magistrate John Andrews said he was not satisfied the extraordinary circumstances needed to grant Azari's release existed, and described the prosecution case as strong.
Azari appeared via video link from Goulburn's supermax prison.
Outside the court, supporters of Azari clashed with media, resulting in a brief scuffle with two cameramen.
Earlier, Azari's defence lawyer accused Prime Minister Tony Abbott of prejudicing the case against his client.
Barrister Steven Boland said Mr Abbott's public statements about the case were an "unprecedented intrusion by a sitting PM into criminal proceedings".
Mr Boland said Mr Abbott spread misinformation about the case.
"Mr Abbott has deliberately or otherwise spread misinformation that has no support in the evidence," he said.
"(It) gives rise to a substantial possibility that Mr Azari's interests have been harmed by the power of Mr Abbott's statement.
"The people of Australia have been told that there's a plot to behead people. It was made up."
Azari was arrested at his Guildford home in Sydney's west in mid-September during the biggest counter-terrorism operation in Australia's history.
Since those raids, Mr Abbott has stepped up his rhetoric on national security.
Mr Boland said the allegation of plotting an attack was untrue and argued Azari's custody conditions at Goulburn's supermax prison were excessively onerous for someone with no criminal conviction.
Azari is facing three other terrorist financing charges.
The matter is next expected back in court on April 29.
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