In his testimony on Wednesday, Jack Roche said he went to the US consulate in Sydney and told authorities: "I've met Usama bin Laden and they (al-Qaida) have targets in mind," he said in taped interviews with police.
He said the embassy directed him to Australia's spy agency, where he was not even able to get anybody to listen to his claims.
Roche said infighting between Australian members of Jemaah Islamiyah (JI) and the group's operations chief Hanbali led to the collapse of the bombing plot.
Abd Al-Rahman Ayub and his twin brother Abd Al-Rahim Ayub, widely believed to have headed the group's Australian arm, were so incensed at Hanbali's interference that they rang Bashir to complain, prompting Bashir to cancel the plot, Roche told detectives.
Bashir has denied involvement in Jemaah Islamiyah.
Roche has pleaded innocent to a charge of plotting to bomb the Israeli Embassy. He faces a maximum of 25 years in prison if convicted.
Roche claimed he'd started "to sober up
from this whole experience" and tried
to tell Australian spies about the plot, but
In taped excerpts played in Perth District Court this week, Roche has repeatedly named Bashir as the head of al-Qaida's alleged Southeast Asian affiliate. He has also described how the Ayub brothers told him to travel to Malaysia to meet Hanbali in early 2000.
Hanbali then sent Roche, 52, to Pakistan and Afghanistan where he briefly met bin Ladin and underwent explosives training, the court heard.
While there, Roche was told to set up an al-Qaida cell in Australia and launch attacks against Israeli targets. Hanbali gave him $8000 to fund the attacks, he said.
On his return, Roche said he informed the Ayub twins about his plans. He said they were angered at Hanbali for interfering in Australian operations.
Bashir was re-arrested in April
The twins were so angry they complained directly to Bashir, Roche said. Bashir was re-arrested in April on the day he finished serving an 18-month prison term for minor immigration offences.
Police in Indonesia say they have new evidence placing him at the head of Jemaah Islamiyah. Bashir has denied that the organisation even exists.
Bashir asked Roche to visit Indonesia to discuss the plot in July 2000, Roche said.
Roche said he had started "to sober up from this whole experience" and tried to tell Australian spies about the plot, but was ignored.
Both the Ayub brothers are believed to have fled to Indonesia after raids in November 2002 by Australian police and intelligence agencies in several cities.
Roche was arrested during those raids, which came in the aftermath of bombings that killed 202 people on the Indonesian island of Bali.