Australian police say five men are accused of planning a Christmas Day terror attack targeting a number of landmarks in Melbourne, the country's second largest city.

The five suspects, between age 21 and 26, were expected to appear in court Friday to be charged with acts in preparation of a terrorist event. They are believed to have been "self-radicalized" and inspired by ISIS, police said.

Four of the five suspects were born in Australia. The fifth is from Egypt. They were arrested in a series of overnight raids at five properties in Melbourne's northern suburbs.

Two other people initially arrested in the raids -- a 26-year-old man and a 20-year-old woman -- were released without being charged, a police statement said.

Victoria Police Chief Commissioner Graham Ashton told reporters that police had gathered evidence in the raids that the plotters were planning to use explosives in their attack.

"We gathered the makings of an improvised explosive device," he said.

Ashton said the suspects had planned attacks on Melbourne's Flinders Street train station, neighboring Federation Square and nearby St. Paul's Cathedral.

"If this had got under our guard this would have been a significant attack," Ashton told reporters. "Certainly (there was the) potential for quite a number of people to be injured or killed in this attack."



Ashton said police had been watching the alleged plotters for some time, adding that intelligence suggested no threats to any other events.

Victoria state Premier Daniel Andrews said there will be extra police on the streets of Melbourne on Christmas Day to make the public feel safe.

Prime Minister Malcolm Turnbull said: "This is one of the most substantial terrorist plots that have been disrupted over the last several years."



"Islamist terrorism is a global challenge that affects us all. But we must not be cowed by the terrorists," Turnbull told reporters.



"We will continue to go about our lives as we always have. What these criminals seek to do is to kill. But they also seek to frighten us, to cow us into abandoning our Australian way of life. They want to frighten Australians. They want to divide Australians. They want us to turn on each other. We will not let them succeed," he added.



Since Australia's terrorist threat level was elevated in September 2014, the government says there have been four extremist attacks and 12 plots foiled by police.



Australian Federal Police Commissioner Andrew Colvin said the plotters had moved very quickly from a plan to develop a capability to attack.



"In terms of events that we have seen over the past few years in Australia, this certainly concerns me more than any other event that I've seen," Colvin said.



"We believe that we have removed the bulk of this particular cell, this group," he said.

The arrests were made days after a truck smashed into a Christmas market in Berlin on Monday, killing 12 people in the latest terror attack to strike Europe this year.



The Associated Press contributed to this report.

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