Prime Minister Tony Abbott revealed details of an alleged terrorism plot in Parliament with the prior consent of the head of the Australian Federal Police (AFP), his office says.

Prominent Australian barrister Robert Richter QC said statements made by Mr Abbott about the two men accused of a terror plot could prejudice a future trial.

Mr Abbott alleged in Parliament that one of the men arrested in Tuesday's terrorism raid in Sydney made a video threatening violence under an Islamic State (IS) flag.

He quoted detailed threats made by the man in the video, which was shown to him in a briefing on Thursday morning by the AFP and ASIO.

The details had not been aired in court.

Mr Richter accused Mr Abbott of using parliamentary privilege in an attempt to influence the judicial process "in a calculated political gambit".

Robert Richter QC says the PM's comments could impact the case. ( AAP: Julian Smith, file photo )

He said the statements might have a highly detrimental impact on the case.

"It's highly theoretical and the question depends entirely on what course the legal proceedings will take," he told the ABC.

"For all I know, there may be an application at some stage to stay proceedings on the basis that things were published which ought not to have been published which prejudiced a proper trial.

"I know that it's a long way down the track, but someone in a responsible position needs to be able to consider the fact that they should watch what they say, especially when, for a blatant political purpose, they are disclosing information that ought not at this stage be disclosed."

Mr Richter said if the statements had been made outside of Parliament, Mr Abbott would have been in contempt of court.

"To make those sorts of inflammatory utterances is calculated to influence the judicial process and it's being done for a political purpose," he said.

But a spokesman for Mr Abbott said: "The Prime Minister quoted the translation with the prior consent of the Commissioner of the AFP, Andrew Colvin."

Accused said they would 'stab kidneys', 'strike necks': Abbott

Omar Al-Kutobi, 24, and Mohammad Kiad, 25, are accused of plotting an imminent terrorist act.

The men were arrested during a raid on a converted garage in the back yard of a house in Fairfield in Sydney's west.

Police alleged that during the raid they found a machete, a hunting knife, an IS flag and the video.

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Mr Abbott told Parliament the two men said they would carry out their attack by "stabbing the kidneys and striking the necks".

"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'," Mr Abbott said.

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

"I don't think it would be possible to witness uglier fanaticism than this - more monstrous fanaticism and extremism than this - and I regret to say it is now present in our country."

Mohammad Kiad, one of the accused men, is a nurse who moved to Australia from Kuwait in 2012. ( Supplied: Facebook )

Immigration Department urgently reviewing men's cases

The two men will remain in custody for at least a month, after their lawyer told Sydney's Central Local Court he was withdrawing their bail application.

The Immigration Department is conducting an urgent review into the men's cases.

Al-Kutobi is a student who fled war-torn Iraq for Australia, and Kiad is a nurse who moved from Kuwait in 2012.

Immigration Minister Peter Dutton said one of the men was suspected of coming to Australia with false documentation.

Appearing on Channel Nine on Thursday morning, Mr Dutton was asked about reports that one of the men entered Australia illegally.

"The initial advice to me allegedly one of the suspects may have come to Australia with some false documentation," he said.

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"At that stage, bearing in mind it was in 2009... over that long period about 50,000 people came on 800 boats.

"It was a difficult time for our intelligence agencies."

Investigators have said it was unclear who the men were allegedly planning to kill, and have refused to confirm reports that a police officer was a target.

"The type of act that we will allege that was going to be undertaken is consistent with the messaging coming out of [Islamic State]," NSW Deputy Police Commissioner Catherine Burn said on Wednesday.

Experts say men could be Islamic State 'lone wolves'

Dozens of Australians are in Syria and Iraq fighting with IS.

IS has a sophisticated online presence and one of its key messages is for its followers to carry out "lone wolf" attacks in their home countries.

Australian National University terrorism expert Dr Clarke Jones said the men could be lone wolves, allegedly acting on behalf of IS rather than directly under its control.

"The larger the contact network, the easier it is for police to detect, so this is why these lone wolf actors that are acting on their own or with somebody else, become really difficult to try and do anything about," he said.

Nick O'Brien, a security expert at Charles Sturt University who worked in counterterrorism at Scotland Yard, said it was inevitable that more lone wolf attacks would succeed.

"Inevitably some of these attacks are going to be stopped by the security agencies like the Australian Security Intelligence Organisation (ASIO) and the police, but it's also inevitable that some are going to get through," he said.