Australian police have foiled what they said was an "imminent" terror attack in Sydney by arresting two men and seizing a machete, a hunting knife, a video, and an Islamic State (ISIS) flag.
New South Wales Deputy Police Commissioner Catherine Burn said it would be alleged that the attack being planned was "consistent with the messaging coming out of ISIS", according to the AFP news agency.
Asked whether the planned attack was a beheading, Burn said police were as yet unsure of its nature but that it was imminent and likely to have involved a knife.
"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," she said.
The men were arrested in a raid on a property in Sydney's western suburbs on Tuesday and have been charged with undertaking acts in preparation or planning for a terrorist act.
"A number of items were located including a machete, a hunting knife, a home-made flag representing the prescribed terrorist organization ISIS, and also a video which depicted a man talking about carrying out an attack," said Burn.
"We will allege that both of these men were preparing to do this act yesterday. We built up information, we received further information which indicated an attack was imminent. And we acted," she added.
ISIS terrorism has recently been on the rise in Australia, with police several months ago arresting 15 terror suspects of an ISIS cell that was planning to behead a random member of the public in a campaign of terror.
Australia in September upgraded its terror threat to high amid growing concerns about militants returning from conflicts in the Middle East.
In December, Sydney was rocked by a siege at cafe by Iranian-born Man Haron Monis, a self-styled cleric with a history of extremist views.
He took 17 people hostage for some 16 hours, with the siege ending after Monis shot dead cafe manager Tori Johnson, prompting police to storm the building and kill him. Another hostage died in the crossfire.
Prime Minister Tony Abbott on Monday reiterated that the cafe siege was inspired by the Islamic State "death cult".
Burn said she did not know the exact nature of the target in this week's alleged attack but that one of those arrested featured in the video seized.
"We can't go into the details of what was actually said in that message," she said. "However, the intent is clear and the intent is what I have told you today."