In a police interview shown in court, Ihsas Khan - who is accused of yelling 'Allahu Akbar' as he stabbed his neighbour - likened the alleged attack to eating a chocolate bar

An accused Islamic terrorist who allegedly yelled 'Allahu Akbar' as he attacked his neighbour with a hunting knife likened the stabbing to eating a chocolate bar in a chilling police interview.

Ihsas Khan was charged with committing a terrorist act and wounding with intent to murder after Wayne Greenhalgh was hacked to near-death in Minto, western Sydney, in 2016.

A detective asked Khan how he felt after allegedly stabbing the then 57-year-old in a police interview shown in court on Wednesday.

'[It felt] like eating a Picnic bar. You don't really think about it, do you?' the 24-year-old calmly responded.

When Khan was told his alleged crime was 'more extreme' than eating a chocolate bar, he replied: 'I think it's the same.'

Ihsas Khan was charged with committing a terrorist act and wounding with intent to murder over the 2016 attack in Minto in Sydney's west

The allegedly self-radicalised Muslim was then asked if he thought the alleged stabbing was 'normal'.

'Is it normal for you to drop bombs in Iraq and Syria? It's the same thing,' Khan responded, adding that he 'felt nothing' and didn't regret his alleged actions.

When asked what he wanted to achieve by stabbing Mr Greenhalgh, Khan said: 'To kill and be killed... Someone who's discharging his obligation of Jihad.'

He also spoke of his admiration for Farhad Jabar, the teenager who shot dead Sydney police employee Curtis Cheng.

When Khan was told his alleged crime was 'more extreme' than eating a chocolate bar, he replied: 'I think it's the same'

Wayne Greenhalgh (pictured in hospital) was repeatedly stabbed in western Sydney in 2016

Khan is seen confronting police just moments after allegedly hacking his neighbour to near-death in an ISIS-inspired attack

Dramatic video shown in court this week showed police yelling at Khan to drop the knife before an officer fired his Taser and he was arrested.

The court heard the 24-year-old had been taking anti-psychotic medication at the time and pleaded not guilty due to mental illness as his Supreme Court trial got underway last month.

Prosecutor Peter Neil SC told the jury Khan repeatedly yelled 'Allahu Akbar' as he attacked the then-57-year-old without warning on Saturday September 10.

Khan had planned to attack a stranger on September 11 to mark the anniversary of the 2001 attack on the World Trade Centre in New York, the court heard.

But a day earlier, Khan spotted his victim wearing a t-shirt with an American motif and decided to attack, prosecutors said.

Wayne Greenhalgh (pictured right) was rushed to hospital after he was stabbed in Minto in 2016

Khan wanted to exact 'revenge for what he regarded as injustices for Muslims in the Middle East', according to Mr Neil.

Khan allegedly said United States soldiers had killed his 'brothers and sisters in Iraq' and yelled out 'you rape our women, you rape our children, you bomb our country'.

Mr Neil said the 'intelligent' university student was motivated by a religious, political or ideological cause to influence the Australian government or intimidate the public.

The court heard Khan said: 'Maybe if I butcher a guy the government would think again about sending the air force [to Iraq].'

The court heard Khan (pictured in school photo) said: 'Maybe if I butcher a guy the government would think again about sending the air force [to Iraq]'

Defence barrister Mark Ierace SC told the jurors many of the facts of the stabbing wouldn't be disputed with Khan admitting he'd 'tried to slaughter a guy'.

But he said Khan suffered schizophrenia and severe obsessive-compulsive disorder at the time and a central issue during the trial would be his mental state.

The prosecutor argued Khan's psychiatric condition didn't stop him controlling his actions or knowing they were wrong.

The trial continues.