By Jack Gramenz, Rachael Ward and Nyk Carnsew in Sydney

A knife attack at a western Sydney church that hospitalised two clergymen is being treated as a terrorist act, granting police expansive powers as they probe the city’s second mass stabbing within days.

A 16-year-old boy is under police guard in hospital after what investigators say appeared to be a religiously motivated attack at Christ the Good Shepherd Church in Wakeley.

The controversial leader of the Assyrian church, Bishop Mar Mari Emmanuel, was stabbed by a black-clad figure while conducting a live-streamed sermon on Monday night.

A priest was also injured after trying to intervene.

NSW Police Commissioner Karen Webb’s declaration of a terrorist incident at 1.35am on Tuesday – authorised by the police minister a short time later – gives police expanded powers to stop and search people, premises and vehicles without a warrant.

Special powers to prevent further attacks could also be exercised if needed, although they were not currently requested, Ms Webb said.

The powers to investigate a terrorist act in its immediate aftermath can be extended up to 48 hours.

The teen allegedly planned the attack, travelling from a home that was not near the church, making comments indicating a religious motive before stabbing the bishop and priest, Ms Webb told reporters.

“They’re lucky to be alive,” she said.

Footage of the stabbing showed a person dressed in black stabbing the bishop at the altar as parishioners screamed and ran to his aid.

The teenager, who was arrested at the scene, was known to police but was not on a terror watch list, Ms Webb said.

The weapon used has been described as a flick knife and detectives are investigating if the boy lost fingers as part of the attack or during the subsequent unrest.

Prime Minister Anthony Albanese was briefed on the incident and the National Security Committee of Cabinet was due to meet on Tuesday.

ASIO director-general Mike Burgess said the agency supported NSW Police declaring an act of terrorism, adding that the incident appeared to be religiously motivated.

“There’s no indication anyone else is involved, but that remains an open investigation,” he said.

Premier Chris Minns and Multiculturalism Minister Steve Kamper met with faith leaders on Tuesday afternoon, thanking them for their overnight efforts to quell retaliation.

Police and paramedics were forced to shelter in the church for several hours as a violent crowd descended on the site, injuring several officers as they were struck with projectiles.

The Assyrian church said Bishop Emmanuel and a senior priest were in a stable condition and appealed for calm.

“We ask for your prayers at this time,” it said on social media.

The Assyrian church preaches a conservative version of Christianity distinct from many of the major denominations active in Australia.

Assyrian Christians living in the Middle East are a minority group and the population has shrunk since the rise of ISIS in Iraq a decade ago, according to Minority Rights Group.

Bishop Emmanuel has previously attracted attention for his outspoken views on a range of topics, including his description of the COVID-19 outbreak as a “plandemic”.

He also publicly criticised Islamic teachings and those of other non-Christian religions.

Local mayor Frank Carbone, speaking at the church scene on Tuesday, said it was very concerning for the community that a 16-year-old boy was allegedly responsible.

“There has to be something wrong when that happens,” he said.

The attack came two days after six people were killed and more than a dozen injured in an attack at the Westfield Bondi Junction shopping centre in Sydney’s east.

The mass stabbing, carried out by a mentally ill Queensland man, shot dead at the scene, was not declared a terrorist incident.