NSW Police has been ordered to apologise after a counter-terror training exercise in which two officers donned the traditional headscarf associated with many Muslim men.

A Sydney Palestinian man had complained after the October 2017 training operation at Sydney's Central Station, in which two officers, playing the roles of terrorist, wore the keffiyeh Arabic scarf.

Sam Ekermawi had alleged that the props used during the exercise vilified Muslims.

The NSW Civil and Administrative Tribunal has now found the props were "unreasonable", "unnecessary" and likely to "incite hatred or serious contempt", and has ordered NSW Police to apologise.

The tribunal heard the officers involved in the exercise appeared to be armed with semi-automatic firearms and were holding people hostage and threatening harm with knives.

In its decision, the tribunal said police could have used balaclavas or masks on the officers acting as the perpetrators, instead of clothing identified with particular cultural communities in Australia.

"We find that NSW Police Force, by allowing the two police officers portraying the armed offenders to wear keffiyehs associated with Palestinian and Arabic people, racially vilified Palestinians and Arabs," the tribunal ruled.

Capacity to incite hate

Ekermawi lodged the complaint soon after the operation, which involved about 200 police and emergency services personnel.

He has made a number of complaints about alleged vilification of Muslims in the past.

Ekermawi claimed the headscarves worn by the two "active armed offenders" were the same as those worn by Palestinians, Arabs, Middle Eastern people and Muslims, and their use "incited hatred or serious contempt" of those people on the grounds of their race.

The keffiyeh became synonymous with former Palestinian leader Yasser Arafat. Credit: AAP

Ekermawi was unable to be contacted by 7News.com.au for comment on Thursday.

The tribunal agreed the props used had the "capacity" to incite hate or serious contempt of Palestinians or Arabs, but acknowledged NSW Police had no intention to vilify any racial group.

NSW Police have been ordered to issue an apology for using the headscarves in the exercise and implement a racial vilification education program.

- with AAP