A 42-year-old Australian-born electrician charged over an alleged terror plot this week had bought materials to build a long-range missile prototype for Isis, police allege.

Haisem Zahab had allegedly been researching how to build the missile and its necessary components before he was arrested by Australian Federal Police at Young, west of Canberra, yesterday, Daily Mail reports.

"The material included details on the electronics and circuitry required to build a missile," police told the Daily Telegraph.

The electrician had not begun building the missile but "had obtained materials to start doing so" and was "researching and designing the weapon", the officer claimed.


Zahab's arrest comes after an anti-terrorism police investigation dubbed Operation Markesberg.

"Police will allege that the man has sought to advise Isis on how to develop high-tech weapons capability,' Prime Minister Malcolm Turnbull said after Zahab was arrested.

"This highlights that terrorism and support for terrorist groups is not limited to our major cities."

Police claim Zahab was able to relay his research to Isis through his extensive family networks in Syria and Iraq, the Daily Telegraph reported.

He had been under investigation by the Australian Federal Police's Operation Marksburg for 18 months, after A$530,000 ($563,000) was seized from extended family members including a man who was suspected of being part of an Islamic State arms racket.

Zahab has been charged with two serious foreign incursion offences and a failure to comply with an order to assist access to data.

The foreign incursion offences carry the maximum penalty of life imprisonment.

Zahab was refused bail at a Young Court on Tuesday and will front Parramatta Court on March 8.

Zahab's family openly wept after his court appearance and an older woman was seen covering her face with her hijab as she yelled at media, according to 9News.

The woman, who was standing with an older man, was eventually stopped by a police officer who held her back.

A man claiming to be Zahab's brother told 7News he felt the tactics used by Australian police to arrest the 42-year-old were "excessive".

"At 3 o'clock in the morning they're blowing doors off the hinges and breaking glass and putting guns at women's and children's heads," the man said.

A neighbour told Daily Mail Australia Zahab, who worked at a business installing solar panels, lived in the Young home where he was arrested with his wife and three children - believed to be a young boy and two girls.

The man said he has known Zahab for five years and he seemed to be "a very nice chap".

The neighbour said he believed Zahab had "an import, export business" and was shocked by his arrest.

"I thought there was a wedding going on today because there was a large number of cars, the street was filled with them at about 2.30pm," the man said.

"It is unbelievable, it is kind of real now. It's just a quiet rural property."

Zahab reportedly travels between Young and Sydney and was the director of solar panel company Switch2Green, according to the Daily Telegraph.

He is the registered owner of Oz Survival Gear, which sells knives and other survival tools.

James Minehan, whose girlfriend lives next door to Zahab, told the Daily Telegraph he often saw the 42-year-old at his home, but said the family kept to themselves.

"You would see him [Zahab] sitting outside while his kids were playing," he said.

Minehan said Zahab would always lock the front gate, which is unusual for a small country town.

"It was a bit weird, we'd be outside near the fence but you'd never see them come out and interact like normal country neighbours," he said.

Turnbull said Zahab was using the internet to research and design a laser warning device for Isis.

"This operation does not relate to any planned terrorist attack in Australia," he said.

Police and dog squad were seen thoroughly searching horse paddocks, chicken coops and other buildings yesterday.

Australian Prime Minister Malcolm Turnbull confirmed The Australian Federal Police arrested the man. Photo / AP
Australian Prime Minister Malcolm Turnbull confirmed The Australian Federal Police arrested the man. Photo / AP

"This is an ongoing matter and we believe he has networks and contacts in Isis," Australian Federal Police Commissioner Andrew Colvin told reporters.

"It's not necessarily just in the conflict zones but in other parts of the world as well and he has been relying on them to pass this information.

"With these offences, we will allege that he has utilised the internet to perform services for Isis, activities in the Syria and Iraq conflict, from Australia."

Colvin said Zahab was "technically trained" and his research was "credible".

Justice Minister Michael Keenan said the arrest came after an 18-month police operation.

"It reminds us that whether you are in a capital city planning an attack on home soil or whether you are in a small country town, trying to assist the terrorist state in the Middle East, you will get caught," he said.