MELBOURNE, AUSTRALIA - MEMBERS of a group of Muslim men who allegedly formed a terrorist cell in Australia discussed killing the then prime minister John Howard in 2004, a court heard on Tuesday.

Prosecutors said two of the 12 men allegedly involved in the Melbourne-based group raised the possibility of killing Howard in September 2004, when they were discussing what actions were permitted under the Koran.

They said secretly-recorded conversations revealed that group member Abdullah Merhi asked the leader, cleric Abdul Nacer Benbrika: 'If John Howard kills innocent families... Muslims, do we have to kill him?'

The prosecution said Merhi also asked if an attack on the Australian government would be wrong if it was aimed at forcing the withdrawal of the country's troops from Iraq.

Benbrika did not give a direct reply to either question, simply saying he was passing on Allah's teaching, according to tapes played to the court.

Benbrika allegedly then goes on to suggest the group 'do a big thing', adding 'You shouldn't kill just one, two or three.'

All 12 men have pleaded not guilty to a string of terrorism-related charges.

In another taped conversation played to the court, also from September 2004, Benbrika's alleged lieutenant Aimen Joud urges the cleric to act before national elections held in October that year.

'Bring the tools, sheikh,' he said. 'Before the election, we'll do something.'

Prosecutor Richard Maidment said the conversations were clearly discussions about committing a terrorist act in Australia.

The men were arrested in a series of swoops in Sydney and Melbourne in November 2005, days after the government passed tough new anti-terrorism legislation, and remain in custody.

A group of nine men arrested at that time appeared in court in Sydney in May last year and pleaded not guilty to conspiring to launch a terrorist attack in Australia.

Their trial has not yet begun. -- AFP