Australian police have said they foiled a potential antisemitic attack on discovering a trailer packed with explosives in northwest Sydney, alarming the Jewish community following a spate of arson and graffiti incidents.

The explosives located in a caravan could have caused a 'potential mass casualty event', authorities have said.

Australian authorities say they are investigating links to overseas actors as they crack down on antisemitic violence.

Australian Prime Minister Anthony Albanese has said the discovery of a caravan packed with explosives in outer suburban Sydney was part of a terrorist plot, with local officials drawing a link between the find and a recent spate of antisemitic attacks.