Young British Muslims undertook military-style exercises at camps in the UK as preparation for future attacks, a court has been told.
Mohammed Hamid incited followers to murder, jurors were told
Footage of alleged exercises have been shown to the Woolwich Crown Court jury.
Mohammed Hamid, 50, of east London, who is alleged to have organised the camps, and four other men deny a series of terrorism charges.
The court heard the men behind the plot to bomb London's transport network on 21 July 2005 were among his "pupils".
Mr Hamid, of Clapton, is charged alongside Mousa Brown, 41, of Walthamstow, east London; Kibley da Costa, 24, of West Norwood, south-east London; Mohammed Al-Figari, 42, of Tottenham, north London, and Kader Ahmed, 20, of Plaistow, east London.
Another man, Atilla Ahmet, has pleaded guilty to three counts of soliciting murder in connection with the case.
Mr Hamid is said to have been the group's senior figure, who, during meetings at his home, encouraged others to commit murder.
David Farrell QC, prosecuting, said all five defendants undertook drill exercises at one camp in the New Forest while pretending to hold guns.
A mobile phone clip from an earlier trip to the New Forest - showing men and a young boy crawling across ground and making forward rolls - was shown to the jury.
Mr Farrell asked jurors: "What you see in these sections is not mere religious instruction, is it?
Mohammed Hamid is charged under the Terrorism Act 2006 with providing weapons and terrorist training. He faces additional charges of soliciting murder, and one charge of possessing terrorist documents
Mousa Brown is accused of providing and receiving weapons training
Mohammed Al-Figari is charged under the Terrorism Act 2006 with attending terrorist training camps
Kibley da Costa is charged under the Terrorism Act 2006 with providing terrorist training and with attending terrorist training camps
Kader Ahmed is charged under the Terrorism Act 2006 with attending terrorist training camps
"The prosecution say these video clips show basic military training. Training which prepared them for further military training.
"It forms the first part of their terrorist training."
Further footage showed a close-up of a melon being quickly knifed in half as men shouted encouragement.
Mr Farrell said: "What is that meant to symbolise?"
He added that a bug planted by MI5 recorded Mr Hamid at his home telling others: "We are supposed to take on two kuffars (non-believers).
"One Muslim is supposed to take on two kuffars. Lucky if we could take on one kuffar."
Police also hid a camera in the woods, jurors were told, and an undercover police officer managed to infiltrate the group.
According to this officer, as they drove past Paddington Green police station in west London, Mr Hamid shouted: "Here is your terrorist, I'm here, come and get me."
The four men convicted of the failed 21 July 2005 bomb attacks attended Mr Hamid's camps and meetings, the court has been told.
In 2004 he was arrested at a stall selling literature alongside the plot's ringleader, Muktar Said Ibrahim, the prosecution has claimed.
Earlier, the court heard that Mr Hamid told recruits that he wanted to see "six or seven" atrocities before the 2012 Olympics and hailed the 11 September hijackers as the "magnificent 15"
Mr Farrell said that internet footage showing beheadings were stored on DVDs seized from the homes of some defendants and would be shown to the court later.