Australian police say they have foiled a terrorist attack in the final stages of its preparation, after 16 people were arrested in Sydney and Melbourne.
About 500 police took part in the raids in Sydney and Melbourne
New South Wales police chief Ken Moroney said a "potentially catastrophic attack" had been averted.
One suspect was shot and wounded during a raid in Sydney. Chemicals, weapons, and computers were seized, police said.
The operation came nearly a week after Australia's anti-terror laws were changed to give police greater powers.
Police raided 23 houses in Sydney and Melbourne early on Tuesday, as part of the country's largest counter-terrorism operation.
The raids involved about 500 police officers and followed a 16-month investigation, officials said.
"I'm satisfied that we have disrupted what I would regard as the final stages of a large-scale terrorist attack, or the launch of a terrorist attack," Mr Moroney told Australia's ABC radio.
Those arrested in Melbourne include Abu Bakr, an outspoken Algerian-Australian cleric who has in the past praised Osama Bin Laden as "a great man".
He was among nine men who appeared in court in the city on Tuesday, and were charged with membership of a "terrorist organisation".
Prosecutor Richard Maidment told the court the men had formed a terrorist group to kill "innocent men and women in Australia".
He claims they received military-style training in rural Australia and had discussions about bomb-making.
Those arrested in Sydney are also due to appear in court.
"The members of the Sydney group have been gathering chemicals of a kind that were used in the London Underground bombings," Mr Maidment said, adding that Abu Bakr was the ringleader of both the Melbourne and Sydney groups.
Police said one of the suspects in Sydney was shot and seriously wounded after they came under fire. They said the suspect had refused orders to surrender.
There was no immediate comment from those arrested.
Police declined to give details of the likely target of the attack, but Victoria state police chief Christine Nixon said next year's Commonwealth Games, to be held in the city, were not a target.
Prime Minister John Howard said the arrests vindicated the government's decision to rush through amendments to the anti-terror laws.
"This country has never been immune from a possible terrorist attack," he said in a televised news conference.
"It's important that we continue to mobilise all of the resources of the commonwealth and the states to fight terrorism."
The changes were enacted on Thursday, to make it easier for police to prosecute suspects believed to be planning attacks.
Mr Howard at the time said he had received credible intelligence of a "terrorist threat".
Australia is a key ally of the US in its "war on terror", and has sent troops to fight in Iraq and Afghanistan.
There has never been a major terrorist attack on Australian soil, although 88 Australians died in the 2002 Bali bombings, and Australia's embassy in Indonesia was bombed in 2004.