Australian police have arrested seven teenagers suspected of extremist ideology in counter-terrorist raids connected to the stabbing of a bishop in Sydney.

The youths are part of the same network as the boy accused of attacking Bishop Mar Mari Emmanuel during a live-streamed church service earlier this month. The 16-year-old involved allegedly spoke in Arabic about the Prophet Muhammad after lunging at the bishop and a priest with a knife. He was charged with committing a terrorist act on Friday.

Counter-terrorism teams raided 13 homes across South West Sydney on Wednesday, after the attack at the Christ the Good Shepherd Church in Wakeley was declared an act of terrorism.

The arrested teenagers were between 15 - 17 years old.

New South Wales (NSW) officials said that following investigations and close surveillance, they will “allege that these individuals adhere to a religiously motivated violent extremist ideology”.

Those arrested allegedly “posed an unacceptable risk to the people of New South Wales,” the counter-terrorism team added. No evidence of specific targets or times for an intended attack were found during searches.

A further five people are assisting police with inquiries.

NSW officials have assured locals that there is no ongoing threat to their community, adding that the arrests had "mitigated any further risks".