Sydney has been shaken by a second stabbing attack this week, with a bishop at a church in the city's south-west targeted and furious locals venting their anger on police.

The shocking incident, which has now been deemed a terror incident, took place at the Assyrian Orthodox Christ The Good Shepherd Church last night. A 15-year-old is now in custody and two people have been injured.

Police were then besieged and pelted with projectiles, causing religious leaders to meet overnight and plead for calm.

Guest: Dai Le, federal MP for Fowler; the church is in her electorate