Videos of Muslim extremists beheading hostages were found in the home of the spiritual leader of 12 Muslims on trial for planning violent jihad to force Australia to withdraw its troops from Iraq, the prosecutor said.

The videos related to the 2004 executions in Iraq of Americans Jack Hensley, Eugene Armstrong and Nick Berg, said prosecutor Richard Maidment, on the second day of Australia's biggest terrorism trial.

The 12 men led by Abdul Nacer Benbrika face charges of being members of an unnamed terrorist organisation and planning to use explosives or weapons for an undisclosed terrorist act, with the intention of coercing a government or intimidating the public.

Another video found in Benbrika's house showed an unnamed Korean man begging for his life before he was beheaded by a masked man using a sword, Maidment said.

"I wouldn't recommend anyone viewing them (the executions). They were harrowing," he said according to a court report by the Australian Associated Press report. Maidment said other members of the group also had videos of the executions.

The prosecutor told the court on Monday that Benbrika, who praised al Qaeda leader Osama bin Laden as a "great man", had talked about killing thousands of people to force Australia to withdraw its troops from Iraq.

Australia has about 550 combat troops in Iraq, which it plans to withdraw by about the middle of 2008. Australia also has about 1,000 troops in Afghanistan.

Documents seized from some of the 12 men praised the hijackers involved in the September 11 attacks on the United States and included bomb making manuals, said the prosecutor. A book titled "The 19 Lions", a reference to the 19 hijackers, was found during a raid on the home of one of the men, local media reported from the court today.

"It (the document) glorifies the aircraft hijackers responsible for the September 11 attacks, suggests they will go down in history, glorifies them as martyrs," said Maidment. "It suggests they will go down in history as perpetrating one of the greatest victories ever perpetrated in the name of Islam," he said.

Maidment said documents also included bomb making manuals, which showed how to make a bomb using easily obtainable chemicals. "Some of it is 'Boy's Own' stuff but it has a serious side to it," he told the court.

The prosecutor said Benbrika had a list suggesting potential targets, which included stock exchanges, energy plants, ports, motorways, tunnels and military bases.

The trial is expected to last nine months.