AFP Deputy Commissioner Mike Phelan (right) said "something was going to happen."

AFP/Sydney

Australian police said on Saturday they had foiled an alleged terror bomb plot reportedly planned for Mother's Day, arresting a Melbourne teenager and detonating three suspected explosive devices.

Australian Federal Police (AFP) and their Victoria state counterparts raided a home in the north Melbourne suburb of Greenvale on Friday, arresting and charging a 17-year-old male.

"We'll allege the teenager was undertaking preparations to undertake a terrorism act as well as possessing things that relate to the commission of a terrorism act," AFP Deputy Commissioner Mike Phelan said.

"These are extremely serious offences and they did involve the use of improvised explosive devices."

Police said they had seen reports suggesting that an attack was planned for Melbourne on Sunday, which is Mother's Day in Australia, but that they could not yet say when or where the alleged act was to occur.

"But let me tell you, something was going to happen," Phelan told a press conference in Melbourne.

"As a result of Victoria police and AFP interception yesterday, some Victorians are going to be alive because of it. Had we not intervened, there was a real threat of action being taken."

Police said they would not be naming the teenager who had been charged due to his age, but said he was expected to face a closed court on Monday.

But Phelan said the teenager came from a loving family and it was deeply troubling to police that young people were becoming so disaffected they were considering endangering the lives of many Australians.

It is the second alleged attack believed to have been foiled in Victoria in recent weeks, after police arrested two men late last month for allegedly planning an Islamic State-inspired attack on Anzac Day commemorations honouring Australian soldiers.

Police said the two cases were not thought to be related.

They said they were still investigating the motivations for the latest alleged offence, but said the suspected explosive devices appeared very rudimentary.

'Serious terror threat'  

A string of incidents, including a December siege in a Sydney cafe by a self-styled cleric who attempted to link his actions to Islamic State, have raised awareness about radicalisation among Muslims.

Australia raised its threat level to high last September and has since carried out a series of counter-terrorism raids, with alarm fuelled by the departure of more than 100 of its nationals to Iraq and Syria to fight with Islamic State jihadists.

Prime Minister Tony Abbott announced the latest arrest, after raids carried out in Melbourne and Sydney, saying there was "evidence of a bomb plot that was in a reasonably advanced state of preparation".

He said while it was important not to underestimate the terror threat, it was also right to keep it in perspective as he urged Australians to live their lives as usual.

"We know that we face a very serious terror threat, a very serious terror threat," he said.

"The tragic truth is that there are people amongst us - not very many, it's true - but there are some people amongst us who would do us harm and it's vital that our police and security agencies be given all the support and all the resources they need to do their job," he said.

Australia has warned of the threat from "home-grown" Islamic State-inspired extremists and has unveiled new security measures including revoking citizenship for dual-nationals linked to terrorism.

In February, two men were charged after police thwarted an "imminent" attack in Sydney, seizing an Islamic State flag, a machete and an Arabic-language video detailing the alleged plot.