Terror Accused Laughed, Joked In Prison

A confessed terrorist laughed with his co-accused in prison as he recounted the lies and stories he claims to have told police about an alleged Christmas Day plot to attack Melbourne.

In secretly recorded prison conversations Ibrahim Abbas told his brother, 23-year-old Hamza, cousin Abdullah Chaarani, 27, and friend Ahmed Mohamed, 25, the "biggest story" was that he pledged his allegiance to Islamic State.

"Ha ha I have pledged my allegiance to ISIS. I do want to destroy your nation," he recounted, before the group burst into laughter.

Ibrahim has pleaded guilty to preparing for a 2016 attack on Federation Square, St Paul's Cathedral and Flinders Street Station, but the three co-accused deny any involvement.

Image: AAP

In the Supreme Court on Tuesday, where the 24-year-old is giving evidence for the prosecution, Ibrahim admitted he had pledged allegiance to Islamic State when he was 19 or 20, and he meant it.

The covert recordings also captured Ibrahim's feelings about getting caught and the plot being foiled.

"Maybe Allah's planning something bigger. Like, bro, psychological warfare," he told the men.

"That was the whole point of Osama Bin Laden, to get them psychologically."

Conversations about their bomb-making knowledge were also recorded, including Ibrahim Abbas saying he'd told police they had never made a bomb because they didn't know how.

Mohamed pointed to that as "the biggest lie", saying he had taken screenshots of an instructional video on his phone "'cos I'm an idiot, simple".

But Ibrahim maintained his position about not making a bomb when quizzed by his brother Hamza's lawyer Felicity Gerry QC on Wednesday afternoon.

Abdullah Chaarani, Ahmed Mohamed and Hamza Abbas, Court Sketch

He admitted they tried first assembling a bomb inside his house, and later testing a detonator at Chaarani's home.

None of the efforts were successful, he said, denying prosecution claims he and the three accused drove to a state forest north of Melbourne, to test their device.

Ibrahim told the court his brother, who had learning difficulties and struggles with his memory, was gullible, vulnerable, easy to deceive and at times Hamza had "no idea what was going on".

He discussed radical Islam with Hamza including "my jihadist ideology" but said he hadn't discussed with him any conversations he'd had with Mohamed about an attack or his plans.

Hamza Abbas. Image: Facebook

He agreed with Ms Gerry that Hamza had been "kept in the dark".

Ibrahim said his brother had not been involved in any talk about making a bomb, or been present during any attempts.

"Hamza didn't prepare a terrorist attack with you at all, did he?" Ms Gerry asked.

"That's correct," Ibrahim replied.

The trial continues.