New threat emerges against Parliament as key suspect in custody after what police claim was plan to behead random person.

Security at Parliament House in Canberra is being ramped up amid reports of a planned terrorist attack.

Senior intelligence sources confirmed to News Corp Australia that spy, police and counter-terrorism agencies had intercepted information regarding a possible attack on Parliament House, and there are concerns the prime minister and other senior officials could be targeted.

The news report said there were fears the building had been "scoped out" for a "Mumbai-style" attack using automatic weapons.

Several armed Australian Federal Police officers have been redeployed to Parliament House, and more will join them in coming days.

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Airport level security checks for visitors and barriers are also being considered.

Gruesome plot at the heart of raids

A plot to behead a random member of the public in Sydney has been thwarted by the biggest anti-terror police raids Australia has seen, with one man charged over the plan to "horrify" the community.

Omarjan Azari, 22, who was remanded in custody at Central Local Court, allegedly conspired with Mohammad Baryalei, the most senior Australian member of Isis (Islamic State) to commit the terror act.

Prosecutor Michael Allnutt told the court that Azari was accused of plans designed to "shock" and "horrify" the community.

The plan involved the "random selection of persons to rather gruesomely execute", he said.

Last night a heavy police presence was expected at a snap protest in Sydney's west against the raids. The protest, promoted under a banner featuring the hardline organisation Hizb Ut-Tahrir, called on the Muslim community to "stand as one" against "government aggression" at Lakemba.

Australian Prime Minister Tony Abbott, who was briefed before raids on Wednesday night, indicated intelligence showed public beheadings were urged by leaders of Syria-based Isis.

"The exhortations, quite direct exhortations, were coming from an Australian who is apparently quite senior in [Isis] to networks of support back in Australia to conduct demonstration killings here in this country," Abbott said. "This is not just suspicion, this is intent."

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Azari, from Guildford in Sydney's west, will face court again on November 13. He was one of 15 people detained during the raids which included 25 search warrants on homes and vehicles.

More than 800 New South Wales and Australian Federal Police raided properties across the suburbs of Beecroft, Bella Vista, Guildford, Merrylands, Northmead, Wentworthville, Marsfield, Westmead, Castle Hill, Revesby, Bass Hill and Regents Park.

Three more raids occurred in Queensland yesterday morning.

Australian Federal Police acting commissioner Andrew Colvin said the raids in Underwood, Logan and Mount Gravatt East southeast of Brisbane were linked to raids in the area last week in which two men were arrested and charged with terrorism-related offences.

One of the Queensland suspects, Omar Succarieh, was seeking bail.

The Sydney plot has raised comparisons with the attack on British soldier Lee Rigby, who was hacked to death on a London street by Muslim extremists last year.

It emerged yesterday that death threats against Christians outside a school and church in Sydney's west have struck fear into parents and churchgoers. Police say two men in a red hatchback hurled abuse as they drove by Maronite College of the Holy Family in Harris Park and Our Lady of Lebanon church on Wednesday. They threatened to "kill the Christians" and slaughter their children while brandishing an Isis flag, a priest said.

NSW Police Commissioner Andrew Scipione warned against any public backlash in the wake of the dawn raids. He said more than 220 police would participate in high-profile Operation Hammerhead, covering transport hubs and important and iconic sites.

The operation followed Australia's outgoing spy chief, ASIO director David Irvine, raising the terror alert level to "high" amid fears of an attack on home soil last Friday.

Chief of Defence Mark Binskin said the defence force was constantly reviewing security at its bases and may adjust the level of security over coming days.

Australia has estimated about 60 of its citizens are fighting for the Islamic State group and Jabhat al-Nusra in Iraq and Syria. Another 15 Australian fighters had been killed, including two young suicide bombers. The Government has said it believes about 100 Australians are actively supporting extremist groups from within Australia, recruiting fighters and grooming suicide bomber candidates as well as providing funds and equipment.

Western governments are facing an uphill battle trying to squeeze the finances of Islamic State jihadists, as the extremists operate like a "mafia" in territory under their control in Syria and Iraq, experts say.

Unlike the al-Qaeda network, which has relied almost exclusively on private donations, Isis holds a large area in Syria and Iraq that allows it to generate cash from extortion, kidnapping and smuggling of both oil and antiquities, analysts say. As a result, the group's funding presents a much more difficult target for Western sanctions compared to al-Qaeda's finances, said Evan Jendruck, an analyst at IHS Jane's consultancy.

Even conservative estimates portray Isis as the world's richest extremist organisation, raking in at least a million dollars a day.

The group is "merciless in shaking down local businesses for cash and routinely forces drivers on roads under its control to pay a tax", a US intelligence official said. "Its cash-raising activities resemble those of a mafia-like organisation."

- AAP, AP, AFP