police australia
Police are diverting traffic and pedestrians away from the area close to Bunbury's main thoroughfare where the hostage situation is taking placeGetty

An Australian teenage boy has pleaded guilty to terrorism charges after police found terror manuals and the equipment for a pressure cooker bomb in a raid on his home in May.

Among evidence seized from the 17-year-old's Melbourne home were encrypted documents entitled: Make A Bomb In The Kitchen Of Your Mom And Pressure Cooker Backpack Bomb With Switch Detonator. Also discovered were a pressure cooker and steel pipes fitted with caps, the Australian Broadcasting Corporation reported.

He pleaded guilty to "engaging in an act in preparation for, or planning, a terrorist act". Prosecutors dropped two other charges against the boy, whose name cannot be revealed because he is under 18.

Police also found extremist Islamic propaganda in the raids, according to evidence submitted in court hearings. The accused did not apply for bail and was remanded in custody. He will next appear in court on Thursday, 17 December.

The boy's guilty plea comes after five people, including a 15-year-old and a 20-year-old were charged with planning to attack government buildings in unrelated terror raids.