Kiad accidentally appeared briefly in court via video link from Silverwater prison on Thursday

The men will apply for bail at court appearance on March 16

Police raid allegedly uncovered a machete, a hunting knife, an Islamic State flag and a video of them making threats of carrying out a terrorist attack

Prime Minister Tony Abbott has released details of the video in which one of two accused terrorists made threats about carrying out an attack on Australia and stabbing victims in their 'kidneys' and 'livers'.

Mohammad Kiad, 25, and Omar Al-Kutobi, 24, were arrested in their shared squalid granny flat at Fairfield, western Sydney, on Tuesday afternoon, where a police raid allegedly uncovered a machete, a hunting knife, an Islamic State flag and a video featuring both the men, with one recorded making threats of carrying out an attack.

During Question Time in parliament on Thursday, Mr Abbott said he was shown the video during his security briefing with the Australian Federal Police Commissioner and the Director-General of ASIO this morning.

'Madam Speaker, kneeling before the death cult flag with a knife in his hand and a machete before him one of those arrested said this: "I swear to almighty Allah, we will carry out the first operation for the soldiers of the caliphate in Australia," he said.

Scroll down for video

Mohammad Kiad, 25 (right), and his Iraqi born housemate Omar Al-Kutobi, 24 (left), were arrested on terror charges in their shared squalid granny flat at Fairfield on Tuesday

Iraqi Minister of Foreign Affairs Ibrahim Al-Jaafari (left) shakes hands with Australian Prime Minister Tony Abbott on Thursday. Al-Jaafari is in Australia to give a first-hand update on the battle against Islamic State

'He went on to say, Madam Speaker, "I swear to almighty Allah, blonde people, there is no room for blame between you and us. We owe you only stabbing the kidneys and striking the necks".

Mr Abbott made the comments while arguing that the parliament should pass the government's proposed further changes to data retention laws.

This comes after social media accounts of one of the two men charged with plotting a terrorist attack involving large knives on Wednesday revealed he was a fashion-loving weightlifter with a keen eye for expensive jewellery.

Pictures of Mohammad Kiad on his Facebook page show him sporting expensive watches and suits as well as taking numerous selfies while at the gym. In contrast to the snaps of him in shiny sparkling tight pants, other pictures show him wearing traditional white Islamic clothing and headpieces.

However in person, the 25-year-old nurse who worked as a removalist has been described as a quiet man who never mentioned his religion, according to Fairfax.

Both men arrived in Australia from the Middle East seeking a better life as refugees but allegedly became radicalised in recent months, it has been claimed.

On Thursday, accused terrorist Kiad accidentally appeared briefly in court.

Kiad popped up on screens at Central Local Court by audio visual link from Silverwater prison, where he is being held with his co-accused, Iraqi-born Omar al-Kutobi, in western Sydney.

He was dressed in prison greens, wore glasses and his beard was trimmed close to his face.

Facebook pictures of Kiad, who immigrated to Australia from Kuwait in 2009, revealed his fashion interest and showed him sporting expensive watches and suits as well as making some strange fashion statements

Bail applications by both men were set aside on a farcical day of hearings at Central when a power blackout and then a computer failure delayed proceedings.

Mohammad Kiad's name was read out by the Commonwealth prosecutor and he was brought into the audio visual room at Silverwater prison by mistake.

Deone Provera, a solicitor assisting Legal Aid in the two men's representation, did not require either man's appearance.

Mr Provera had their release applications set down for March16.

Commonwealth DPP prosecutor Kay Marenos said the brief of evidence against the men was four pages long 'but that is likely to change' and included photographs and a short video.

Immigration Minister Peter Dutton told the Today Show on Thursday Kiad, from Kuwait, and Al-Kutobi, from Iraq, were granted refugee status.

Al-Kutobi was granted citizenship in 2013 and was studying to be a nurse after he arrived in Australia by plane in 2009. The Daily Telegraph alleges a senior intelligence source has confirmed he arrived in the country with false documentation.

A keen weight-lifter, the 25-year-old removalist also shared selfies of himself at the gym

Mr Kiad entered Australia in 2012, where he had worked as a nurse - but when he arrived in Australia he found he could not transfer his skills. He was granted a visa under the family and spousal visa arrangements and recently took up a job as a removalist but was fired and was on the dole at the time of his arrest, it has been reported.

Mr Dutton told the Today Show: 'We've stopped the boats now and we need to make sure they remain stopped.’

However, Today Show host Karl Stefanovic pointed out: 'This guy came by plane though.’

Attorney-General George Brandis told parliament on Wednesday: 'Significantly, police also located a video recording of one suspect kneeling in front of an ISIL (IS) flag, with the knife and machete, making a politically-motivated statement, threatening to undertake violent acts with those weapons.'

A Sydney police station and officers on the street were revealed to have been the the targets with attacks scheduled for just before midnight on Tuesday, Channel Nine reported.

In contrast to the snaps of him in shiny pants, other pictures show him wearing traditional white Islamic clothing and headpieces

Pictures of the duo from mid-2013 show them poking faces and smoking shisha together.

Mr Al-Kutobi was granted citizenship in 2013 and was studying to be a nurse while Mr Kiad, originally from Kuwait where he immigrated from in 2009, was reported to have been recently fired from his removalist job.

While some neighbours told Fairfax that he was 'friendly', 'open minded about religion' and 'never talked about Islam', others admitted he and Mr Al-Katobi had begun acting differently after the anti-terror raids in western Sydney last September.

'He began wearing a scarf, just like ISIS and Mohammad, he grew a long beard,' Neighbour Michael David said of Al-Kutobi.

'I heard them praying in there [the granny flat] and reading the Koran,' said Mr David, who speaks Arabic.

Ms Jeisele-Brown said the pair had fallen out with another neighbour over the last month or two for 'speaking sharp' and that she had been upset with them after finding a religious picture of hers dumped in the rubbish bin.

Pictured smoking shisha in mid-2013: The mens' neighbours said they mostly kept to themselves but admitted their behaviour had changed drastically in the last few months following police raids in western Sydney and the Martin Place siege

'I had been in hospital having chemotherapy and when I came back home my picture of Jesus Christ was missing,' she said.

'I found it in the rubbish. I don't know who dumped it but I thought ... I didn't say anything.'

Neighbours Teresita Heisele-Brown said she had noticed that after the Martin place siege, the two men had had lengthy discussions in Arabic and had watched a lot of television, perhaps coverage of the a siege.

She said when the police came around to arrest the pair, Mohammad had pretended he didn't speak English.

She said detectives had made the men lie on the ground while they handcuffed them.

Their home, workplaces and cars were all searched by police.

On Thursday, accused terrorist Kiad accidentally appeared briefly in court.

Their Fairfield home, a granny flat in Sydney's west (pictured)