Five Australian teenagers were arrested Saturday on suspicion of plotting a terrorist attack at a Veterans' Day ceremony that included targeting police officers, officials said.

The suspects included two 18-year-olds who are alleged to have been preparing an attack at the ANZAC Day ceremony in Melbourne, Australian Federal Police Acting Deputy Commissioner Neil Gaughan told reporters.

'We believe that the potential attack was inspired by the Daesh death cult in the Middle East'

- Prime Minister Tony Abbott

Another 18-year-old was arrested on weapons charges and two other men, aged 18 and 19, were in custody and assisting police, police said.

ANZAC stands for the Australian and New Zealand Army Corps and commemorates the World War I battle in Turkey on April 25.

"I will say the attacks related to edged weapons," Victoria Police Acting Deputy Commissioner Shane Patton told The Australian. "We believe the attacks could have occurred at any time in the next week."

The arrests took place in Melbourne, where a joint counterterrorism team of about 200 officers served a total of seven warrants Saturday morning. Police said they were conducting searches at properties.

Prime Minister Tony Abbott has warned that the terrorism threat in Australia has escalated with one-third of all terrorism-related arrests since 2001 occurring in the last six months.

“We believe that the potential attack was inspired by the Daesh death cult in the Middle East,” Abbott said, hours after the arrests at a news conference, The New York Times reported. Daesh as another term for ISIS.

Australia's government has raised the country's terror warning level in response to the domestic threat posed by supporters of the Islamic State group. In September last year, the group's spokesman Abu Mohammed al-Adnani issued a message urging attacks abroad, specifically mentioning Australia.

At least 110 Australians have gone to Iraq and Syria to fight alongside extremists, and the nation's security agency is juggling more than 400 high-priority counterterrorism investigations — more than double the number a year ago.

In February, two men were charged with planning to launch an imminent, Islamic State-inspired terrorist attack in Australia after authorities said they appeared on a video threatening to stab the kidneys and necks of their victims. And in September, a man arrested during a series of counterterrorism raids was charged with conspiring with an Islamic State leader in Syria to behead a random person in Sydney.

In December, Man Monis, an Iranian-born, self-styled cleric with a long criminal history, took 18 people hostage inside a cafe, forced them to hold up a flag bearing the Islamic declaration of faith and demanded he be delivered a flag of the Islamic State group. Monis and two hostages were killed.