Australian police say two men have been arrested in Sydney as part of an ongoing investigation into a group that officials have accused of plotting to kill a random member of the public in the largest Australian city.

Sulayman Khalid, 20, was charged with possession of documents designed to facilitate an attack, while a 21-year-old was charged with breaching a control order, police said on Wednesday.

Tony Abbott, prime minister, said on Tuesday that security officials had intercepted a heightened level of "terrorist chatter", but there were no specific threats of attacks.

Michael Phelan, Australian federal police deputy commissioner, said there was "no specific terrorist threat" and the arrests were related to an ongoing "counterterrorism operation" that led to a series of raids in Sydney in September.

One man was charged at that time with conspiring with a fighter leader in Syria to behead a random person in Sydney, Associated Press news agency reported.

"There is nothing that indicates at all that [there were] any specific targets or time frame in relation to this particular activity at all,'' Phelan said, though he added that the documents seized by police did talk about potential government targets.

Australia, a staunch ally of the US and its action against the Islamic State in Syria and Iraq (ISIL), is on high alert for attacks by sympathisers of the group and from home-grown fighters returning from fighting in the Middle East.

Police said they had now arrested and charged 11 people with terrorism-related offences since launching massive raids in Sydney and Brisbane in September, soon after raising the terror threat to "high" for the first time.

Man Haron Monis, a self-styled sheikh who was facing numerous charges for violent crimes, held hostages at gunpoint at the Lindt Chocolate Cafe in Martin Place, a central Sydney shopping and office precinct, from morning on Monday last week.

Two hostages, cafe manager Tori Johnson and lawyer Katrina Dawson, were killed along with Monis when police stormed the cafe.

An official investigation into the final moments of the siege and the deaths of all three is under way.

Source: Agencies