"Clear links between these suspects, the criminal element and the terrorist element are evident. This is clear evidence of a crossover between criminality and terrorism," NSW deputy commissioner David Hudson told reporters.
The 18-year-old men were arrested in a western Sydney suburb during a counter-terrorism police raid late on Friday. They were charged with illegally selling short- and long arm pistols to people unauthorized to have them.
Hudson said the duo were "on the periphery of targets" police were looking at. "We do monitor a large number of individuals within our community that we have suspicions in relation to terrorist activity. These targets came up on the periphery of that," he explained.
Australia announced a rare firearms amnesty starting this Saturday in a bid to take unregistered guns off the streets after several terrorist attacks involving illegal guns. In May, a gunman who pledged allegiance to a terror group shot and killed another man and took a woman hostage in Melbourne before being lethally shot.