Islamic State directed Australia plane bomb plot, police say

One of the men, a 49-year-old from Sydney, brought the device to the airport on July 15 in a piece of luggage that he had asked his brother to take with him on the flight - but he had not told his brother the bag contained explosives.

But for reasons still unclear, the bag never got past the check-in counter. Instead, Mr Phelan said, the 49-year-old man left the airport with the bag, and his brother continued on to the flight without it.

"This is one of the most sophisticated plots that has ever been attempted on Australian soil," Mr Phelan said.

"If it hadn't been for the great work of our intelligence agencies and law enforcement over a very quick period of time, then we could well have a catastrophic event in this country."

The details he provided on Friday are the first that officials have released since four men were arrested in a series of raids in Sydney last weekend.

Khaled Khayat, 49, and Mahmoud Khayat, 32, have been charged with two counts of planning a terrorist act. A third man remains in custody, while a fourth was released without charge.

Khaled Khayat's brother has not been charged in connection with the plot, because police believe he had no idea the bag contained explosives, Mr Phelan said.

Lawyer Michael Coroneos appeared on behalf of Khaled and Mahmoud Khayat at a brief court hearing on Friday. They were refused bail and the case was adjourned until November 14. Police have not detailed the men's relationship.

"They're entitled to the presumption of innocence," Mr Coroneos said outside court, declining to answer any other questions.

The components for the device, including what Mr Phelan described as a "military-grade explosive," were sent by a senior Islamic State member to the men in Sydney via air cargo from Turkey.

An Islamic State commander then instructed the two men who have been charged on how to assemble the device, which police have since recovered, Mr Phelan said.

After the July 15 bid failed, the men changed tactics and were in the early stages of devising a chemical dispersion device, which they hoped could release highly toxic hydrogen sulphide, he said.

No specific targets had been chosen, though an Islamic State member overseas had given the men suggestions about where such devices could be placed, such as crowded areas or on public transport.

"Hydrogen sulphide is very difficult to make, so I want to make it quite clear that while it may be a hypothetical plot, we were a long way from having a functional device," Mr Phelan said.

"There were precursor chemicals that had been produced, but we were a long way from having a functioning (device)."

Police had no idea either of the plans were in the works until they received a tip-off through intelligence agencies on July 26, Mr Phelan said. They arrested the men on July 29.

The allegation that Islamic State was able to ship explosives to Australia undetected was troubling, police admitted.

"All the security agencies and those responsible for security of cargo and so on have put in place extra measures since that time," Mr Phelan said.

"It is concerning that it got through, yes, it's hard to deny that."

He said police still do not know precisely why the bag containing the explosives never made it past the check-in counter. Some theories are that it was too heavy, or that the man simply chickened out.

One of the men charged was put in touch with the Islamic State commander police believe directed the plot in April, Mr Phelan said. He declined to release the Islamic State commander's name.

If convicted, they could face a sentence of life in prison.

Justice minister Michael Keenan said the immigration minister had ordered extra security of air cargo.

"You would appreciate it is a very big job to screen, and Australia is a very open economy - there is an enormous number of packages moving both inward and outward on any given day," Mr Keenan told reporters.

"But we've taken measures to improve screening."

AP