ABC/AU:
Victorian Premier Daniel Andrews described the plot as an "act of evil", while Victoria Police Chief Commissioner Graham Ashton said police had seized "the makings of an improvised explosive device".
Speaking at a press conference today, Mr Turnbull said: "Overnight our police and security agencies have disrupted a very substantial terrorist plot.
Overnight, the Victoria Police, working with the Australian Federal Police and ASIO, have arrested seven persons, five of whom are still in custody, searched five premises and are continuing to search them.
"What they have uncovered is a plot to explode improvised explosive devices in central Melbourne in the area of Federation Square, on or about Christmas Day.
"This is one of the most substantial terrorist plots that have been disrupted over the last several years."
The raids were part of a counter-terrorism operation involving Victoria Police, the Australian Federal Police and ASIO.
Commissioner Ashton said it was believed a number of people were intending to carry out an attack involving explosives and other weapons.
"Over the last fortnight … we have had to conduct a criminal investigation relating to the formation of what we believe was a terrorist plot," he said.
"We believe that there was an intention to conduct what we call a multi-mode attack, possibly on Christmas Day.
Police believe the locations to be targeted include Federation Square, Flinders Street Station, and St Paul's Cathedral.
Commissioner Ashton said: "We believe [the plot] was going to involve an explosive event, the use of explosives, and we gathered evidence to support that.
"There has also been evidence that we will lead around the possibility of an intention to use other weapons. That could include knives and/or a firearm.
"Certainly these [people] are self-radicalized, we believe, but inspired by ISIS and ISIS propaganda."
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