REPUBLIKA.CO.ID, SYDNEY - Militants connected with radical group Islamic State were planning to behead a member of the public in Australia, Prime Minister Tony Abbott said on Thursday, after hundreds of police raided homes in a sweeping counter-terrorism operation.

Abbott said there was a "serious risk from a terrorist attack" days after Australia raised its national terror threat level to "high" for the first time, citing the likelihood of attacks by Australians radicalised in Iraq or Syria.

Australia is concerned over the number of its citizens believed to be fighting overseas with militant groups, including a suicide bomber who killed three people in Baghdad in July and two men shown in images on social media holding the severed heads of Syrian soldiers.

More than 800 police were involved in the pre-dawn security operation in Sydney and Brisbane, which was described as the largest in Australian history and resulted in the detention of 15 people, police said.

Abbott told a news conference that members of the radical group had planned to conduct a public beheading.

"That's the intelligence we received," he said.

Media reported that the plans included snatching a person at random in Sydney, Australia's largest city, and executing them on camera draped in the group's black flag.

"The exhortations, quite direct exhortations, were coming from an Australian who is apparently quite senior in ISIL to networks of support back in Australia to conduct demonstration killings here in this country," Abbott said, referring to the group otherwise known as Islamic State that has seized large swaths of territory in Syria and Iraq.

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