Sydney terror suspect 'tried to join Australian army'

Police said a large knife and an IS-style flag were found in the raided house

One of two men charged with planning a terror act in Sydney once tried to join the Australian army, his family says.

Omar Al-Kutobi wanted to become a soldier out of love for the country but his application was rejected two years ago, his father Ahmad says.

Mr Kutobi, 24, and Mohammad Kiad, 25, were arrested by police in Sydney's suburb of Fairfield on Tuesday.

Police allege they were about to kill or harm a member of the public with a knife when they were detained.

The pair will remain in custody after their lawyer told a Sydney court they would apply for bail in March.

Police say a hunting knife, an Islamic State (IS) flag and the video were seized.

'The best country'

Ahmad Kutobi said his son had applied to join the army in 2013 but at that time he was only a permanent resident. He was granted citizenship several months later.

Police have been on a state of heightened alert in Sydney since the end of last year

The Iraqi-born man first came to Australia as a refugee in 2009.

"He told me life in Australia is so hard," the father, who now lives in Germany, was quoted as saying by Australia's Sydney Morning Herald newspaper.

"I told him: 'You don't remember when you said Australia is the best country in the world?'"

His son reportedly replied: "Yes, but it is changing."

After the two suspects' arrest, Prime Minister Tony Abbott said they had made a video saying they would stab kidneys and strike at necks.

Mr Abbott said the tape showed one of the suspects promising to "carry out the first operation for the soldiers of the [IS] caliphate in Australia".

The pair, who were not previously known to police, are charged with undertaking acts in preparation for planning for a terrorist act. Police said their operation had come after a tip-off.

Mr Abbott also said tougher security around people applying for residency was needed, adding that similar issues had come to light with Man Haron Monis, the man who took hostages at a cafe in Sydney in December.

The cafe siege left two hostages and Monis - a religious radical who had come to Australia as a refugee - dead but no direct links with Islamist militants have been identified.