Sydney men arrested over beheading plot

Two Sydney men have been arrested over an alleged terror plot with possible Islamic State (IS) links after police suspected an immediate public beheading was being planned.

New South Wales Deputy Police Commissioner Catherine Burn said Wednesday that police acted quickly and arrested the men Tuesday to prevent what they believed was a terrorist attack to take place on the same day.

"The type of act that we will allege that was going to be undertaken is consistent with the messaging coming out of IS," she told reporters, according to Xinhua.

"When we did the search of the premises, a number of items were located, including a machete, a hunting knife, a home-made flag representing the prescribed terrorist organization IS, and also a video which depicted a man talking about carrying out an attack," Burn said.

"We will allege that both of these men were preparing to do this act yesterday."

The two men will appear in a south western Sydney court later Wednesday.

The arrests were made by the Joint Counter Terrorism Taskforce, which investigates Australians suspected of plotting terrorism attacks on home soil and Australians with links to overseas terrorists.

The taskforce has so far arrested 12 people, including Omarjan Azari, 22, who was detained in Sydney last September and accused of plotting random beheadings of members of the public in Sydney and Brisbane.

Azari remains in jail.

The latest arrests follow a 17 hour siege in a Sydney CBD cafe in mid-December which left two hostages and the gunman who staged the siege dead.