He was holding both weapons and kneeling in front of a roughly-cut piece of black material that the men had painted on themselves, Fairfax has been told. Two faces of terrorist suspect Mohammad Kiad. Credit:Facebook "This was an imminent attack in Australia inspired by the ISIL or Da'esh death cult," Prime Minister Tony Abbott said in Parliament on Wednesday, referring to the so-called Islamic State. "This is a serious problem and I fear ... it will get worse before it gets better. As we have seen again and again in recent times, the death cult is reaching out all around the world including in Australia." Terrorism experts have warned that such "lone wolf" plots are becoming almost impossible to detect and police are relying on random tip-offs from the public but their luck will soon run out.

"The concerning thing about this clearly is that this represents the nature of the environment that we currently face," NSW Deputy Commissioner Catherine Burn said on Wednesday. "This is indicative of the threat we now have to live with." Police raids: The Fairfield house from the front. Credit:Daniel Munoz Suspects 'gentle, open-minded' Mr Al-Kutobi, a nursing student from Iraq, and Mr Kiad, a removalist from Kuwait, were described by friends and neighbours as gentle, quiet and open-minded about religion. The Fairfield granny flat that was raided by police on Tuesday. Credit:Daniel Munoz

The pair had generally been friendly, prayed multiple times a day and were fond of pizza, said a neighbour, who asked only to be known as Michael. However, widespread counter-terrorism raids in Sydney in September and the Lindt Cafe siege in December appeared to take a heavy toll on both men, he said. They traded their Nike sneakers and Dolce and Gabbana jeans for religious robes and long beards. Close call: NSW Police Deputy Commissoner Catherine Burn. Credit:Kate Geraghty This is a serious problem and I fear ... it will get worse before it gets better. Prime Minister Tony Abbott Mr Kiad shaved his moustache and started wearing a bandanna or scarf around his head in a style which was "like the ISIS guys you see on TV", Michael said.

Neighbour Roberto Macatangay said they became more aggressive towards him in recent months, whereas they used to crack jokes and speak kindly about all religions. Accused: Mohammad Kiad (left) and Omar al-Kutobi. Credit:Facebook However, neither man was on any intelligence watch lists and police were forced to act on Tuesday immediately after receiving a tip-off. Teresita Heisele-Brown, 62, who lives in an 11-member boarding house attached to the granny flat, said she woke from an afternoon nap around 4pm to the sound of heavily-armed police in the backyard, shouting "come out with your hands up!". "When I looked out of my door I saw the two men walking up with their hands behind their head," she said. "They handcuffed them and made them lie down on the ground. I remember Mohammad was saying 'I don't speak English!'."

'Very, very serious' charges laid The pair did not apply for bail in Fairfield Local Court on Wednesday and will reappear in Central Local Court on Thursday where there is tighter security and a capacity to appear via audiovisual link due to security concerns. Both were charged with planning a terrorist act and Commonwealth Prosecutor Michael Allnut told Fairfield court the allegations should be dealt with in the Supreme Court because they were "very, very serious". The video did not state a location or target for the attack, only that it was to happen "today". Ms Burn said the intent was "clear" and the act was consistent with Islamic State messaging. "We believe the men were potentially going to harm somebody, maybe even kill somebody," she said.

The Islamic State group's scattergun tactic of urging followers around the world to carry out attacks with minimal planning and preparation has raised fears that "lone-wolf" radicals not connected to established extremist networks will be inspired to develop plots. Professor Greg Barton, a terrorism expert from Monash University, said what was known about the alleged plot and the two suspects fitted with this trend. "This is a very worrying development," Professor Barton said. "It may well be that these guys were largely self-radicalised. We don't think they were plugged in to any known networks. The fact that their Islamic State flag was something that was homemade suggests they didn't have the connections to procure anything." Tip-offs from the community were becoming crucial for police but there was a degree of luck in relying on random tip-offs to thwart terrorist attacks, Professor Barton said. "And that raises the question, when will our luck run out?"

with David Wroe