Just in: Two men arrested in NSW over ‘public beheading’ plot.

A NEIGHBOUR of two men arrested in counterterrorism raids this morning said he had become afraid of them in recent months.

Omar al-Kutoba, 24, and Mohammad Kiad, 25 are suspected of planning to carry out an attack yesterday, amid suspicions they were plotting a public beheading.

A machete, a hunting knife and a flag associated with Islamic State were among items seized in the raids on their Fairfield home, along with a video of a man talking about carrying out an attack.

Neither man appeared during a brief hearing in Fairfield court, in Sydney’s west this afternoon, where prosecutor Michael Allnutt said they are facing a “very, very serious allegation.”

Both have been charged with preparing or planning a terrorist act.