Australian Federal Police deputy commissioner Michael Phelan (L) speaks to the media alongside Prime Minister Tony Abbott in Sydney on April 18, 2015 after two men were arrested in Melbourne for allegedly planning an IS-inspired terrorist attack
Two men were arrested in Melbourne on Saturday for allegedly planning an Islamic State-inspired attack at Anzac Day commemorations honouring soldiers who fought and died for Australia -- the country's most important national event.
Seven search warrants were executed in the country's second largest city by a joint counter-terrorism team of 200 officers, two months after Prime Minister Tony Abbott warned the threat from home-grown extremists was worsening.
Police said two 18-year-olds were held over terrorism-related offences with one of them, Sevdet Besim, charged. He appeared briefly in court accused of conspiring to commit a terrorist act and was remanded in custody.
"It is alleged both men were undertaking preparations for planning terrorist acts in Melbourne, which included targeting police officers," Victoria state and federal police said in a joint statement.
"Part of their alleged planning included targeting an Anzac Day ceremony."
Ceremonies are due to be held in towns and cities across the country on April 25 to remember those who served as Australian and New Zealand Army Corps soldiers.
This year's events have assumed added significance with the day marking a century since the bloody World War I Gallipoli campaign in what is now Turkey.
More than 60,000 Australian and New Zealand troops joined an Allied expeditionary landing on the peninsula in 1915, and 11,500 of them never returned.
The arrests come just days after Australia began deploying 330 more troops to Iraq for two years to train local soldiers fighting jihadists including the Islamic State group, joining an aerial and special forces contingent in the region.
A third man held on Saturday, also 18, was arrested on weapons charges with two other teenagers, aged 18 and 19, in custody and assisting with enquiries.
Police said was it believed the attacks would have involved "edged knives", reportedly including a sword, although there was no direct evidence to suggest a beheading, a killing method favoured by jihadists.
"At this stage we have no information that it was a planned beheading. But there was reference to an attack on police," Victoria Police Acting Deputy Commissioner Shane Patton told a news conference.
"Some evidence that was collected at a couple of the scenes and some other information we have leads us to believe that this particular matter was ISIS-inspired."
ISIS is another name used to refer to the Islamic State group.
Police confirmed that the men, who resisted arrest, were associates of Numan Haider, who was shot and killed by counter-terrorism forces in September last year in Melbourne after stabbing two police officers.
- Pre-emptive action -
Abbott said while authorities had more than 400 investigations under way into potential threats "this was the only attack that we were aware of at an advanced stage of planning".
He added that the best way to react was to lead normal lives.
"The greatest act of defiance that Australians could make towards those who would do us harm is to turn up in very large numbers at Anzac Day services to show support for our country, our values and our armed forces."
Australia raised its threat level to high last September and has since carried out a series of counter-terrorism raids, with alarm fuelled by the departure of more than 100 of its nationals to Iraq and Syria to fight with jihadists.
At least 150 Australians were supporting them through recruiting and fundraising, Abbott said.
A string of incidents, including a December siege in a Sydney cafe by a self-styled cleric who attempted to link his actions to Islamic State, have raised awareness about radicalisation among Muslims in Australia.
In February, two men were charged after police thwarted an "imminent" attack in Sydney, seizing an Islamic State flag, a machete and an Arabic-language video detailing the alleged plot.
The same month Abbott, in a national security address, warned of a long-term era of heightened threats from "home-grown" extremists as he announced fresh measures to combat the issue including revoking citizenship for dual-nationals linked to terrorism.