File photo of armed police officers pointing as they stand close to the cafe that was under siege in Sydney. (Associated Press)
Australian counter-terrorism police have arrested two men in Sydney, officials said on Wednesday, a day after warnings of heightened "terrorist chatter" in the aftermath of the fatal cafe siege in the city's financial hub.
No further details were immediately available but the Australian Federal Police said the arrests were part of an ongoing operation.
In September, police carried out a series of raids across Sydney and Brisbane following a flow of its nationals to Iraq and Syria to fight with the Islamic State group and other jihadists.
At least 70 Australians are currently fighting for Islamic militants overseas. At least 20 have died and there are mounting concerns that increasing numbers of youths are being radicalised and could mount attacks at home.
At the time of the September raids, Australia raised its threat level to high, which means an attack is likely, and Prime Minister Tony Abbott on Tuesday warned people to be alert over the Christmas period.
"A briefing from the security agencies today indicated that there has been a heightened level of terrorist chatter in the aftermath of the Martin Place siege," Abbott said.
"That's why it's important that people remain alert and aware as well as reassured that our police and security agencies are doing everything they humanly can to keep us safe."
Last week, Iranian-born gunman Man Haron Monis, who had a history of extremism and violence, took 17 hostages in Sydney's financial heartland, unveiling an Islamic flag.
He was killed as armed police stormed the eatery after 16 hours. Two hostages also died -- mother-of-three Katrina Dawson, 38, and 34-year-old Lindt cafe manager Tori Johnson -- while several were injured.
Australia has not officially branded the Sydney siege as a terrorist attack and Abbott declined to speculate on any potential new threat.