Police have charged a third suspect with an arson attack on a Melbourne synagogue that was allegedly directed by Iran.

An Australian spy agency boss has told an inquiry he had pivoted resources away from counterterrorism to espionage a few years before two gunmen massacred 15 people at a Sydney Hanukkah celebration.

Iran's ambassador to Australia has been seen preparing to leave the country as a result of a diplomatic rift between the two countries.

An Australian army private and her husband accused of spying for Russia have been denied bail on the first charges against suspected operatives under Australia’s updated 2018 espionage laws.

Australian police say a knife attack in Sydney that wounded a bishop and a priest during a church service as horrified worshippers watched online and in person was an act of terrorism.

The head of Australia’s main domestic spy agency says the country has downgraded its terrorism threat level from “probable” to “possible” for the first time since 2014.