Two men arrested hours from allegedly launching a terrorist attack in Sydney had detailed their plot in a video in which one of them clutched knives while kneeling before an Islamic State flag.
Omar Al-Kutobi, 24, and Mohammad Kiad, 25, were arrested after heavily-armed police raided their western Sydney home on Tuesday afternoon, in an 11th-hour action authorities say almost certainly saved the lives of innocent Australians.
A number of items were seized from their small granny flat on Riverview Road in Fairfield, including a machete, hunting knife and homemade Islamic State flag, as well as a video which allegedly shows one of the men vowing an attack in the name of IS.
While it wasn't clear where the attack was to take place or who would be targeted, NSW Police Deputy Commissioner Catherine Burn said authorities acted on intelligence Al-Kutobi and Kiad were in the final hours of preparing an attack.
The Nine Network reported that Sydney police were the target of the plot.
Al-Kutobi, a computer science student, is from Iraq and was granted Australian citizenship in 2013.
Kiad is believed to have moved to Australia from Kuwait around four years ago and was reportedly studying nursing and working as a removalist with Al-Kutobi.
"We believe that the men were potentially going to harm somebody, maybe even kill somebody, and potentially using one of the items that we identified and recovered yesterday, potentially a knife," Ms Burn said.
"One of the items that will be introduced into evidence is a video, and in that video, we will allege that one of the men indicated that an attack was going to be carried out."
Details of the contents of the video emerged on Wednesday, with Prime Minister Tony Abbott telling parliament it was a "recording of one suspect kneeling in front of the ISIL flag with the two knives whilst making a statement in Arabic".
"This was an imminent attack in Australia inspired by the ISIL or Da'esh death cult," he said.
The two men had allegedly purchased a knife earlier on Tuesday before returning home, Attorney-General George Brandis said, just hours before the raided by NSW Police and the Joint Counter Terrorism Taskforce.
Senator Brandis said the swift police action likely "prevented harm to innocent Australians and potentially saved one or more lives".
Al-Kutobi and Kiad, however, were not believed to be on any watchlists.
AFP deputy commissioner Michael Phelan said the latest raids were another example of the "new paradigm for all of us".
A prominent member of the Sydney Islamic community, who has knowledge of the investigation into the two men, said a tip-off had led to the arrests.
"No one knows anything about these guys - (they went) completely under the radar," he said.
He warned it would be difficult to avoid similar plots from being carried out by lone wolves who may not be on security watchlists.
Neighbours say Al-Kutobi and Kiad were extremely religious.
The two are charged with undertaking acts in preparation or planning for a terrorist act, which carries a maximum of life in prison.
They will appear in Sydney's Central Local Court on Thursday via video link after their matter was adjourned and moved from Fairfield Local Court amid security issues.
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