MELBOURNE, Feb 19 (Reuters) - A member of a homegrown Muslim terrorist group in Australia discussed killing former prime minister John Howard during a religious lesson, a prosecutor told a court on Tuesday.

Abdullah Merhi raised the idea of killing Howard in a September 2004 conversation with the group's spiritual leader Abdul Nacer Benbrika and talked about attacking the government to force it to withdraw troops from Iraq, the prosecutor told the Victoria state Supreme Court.

The 12 men led by 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.

The prosecutor has told Australia's biggest terrorism trial that the men had planned violent jihad in Australia against an unnamed target to force Australian 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.

The 12 charged are: Abdul Nacer Benbrika, Fadl Sayadi, Ahmed Raad, Aimen Joud, Abdullah Merhi, Amer Haddara, Shane Kent, Majed Raad, Hany Taha, Shoue Hammoud, Bassam Raad and Ezzit Raad.

All have pleaded not guilty.

Prosecutor Richard Maidment told the court on Tuesday that in a secretly recorded conversation Merhi had a sought Benbrika's advice on what kind of retribution was specified in the Koran, reported Australian Associated Press from the court.

Reading from the transcript, Maidment told the jury that Merhi had asked: "If John Howard kills innocent families ... Muslims, do we have to kill him?" Benbrika gave no answer.

Benbrika later suggested the group should "do a big thing".

"You shouldn't just kill one, two or three," Benbrika said in a tape recording played to the jury.

The prosecutor has told the court that Benbrika praised al Qaeda leader Osama bin Laden as a "great man" and that he regarded Australia as a "land at war" because of its involvement in Iraq and a justifiable terrorist target.

When Benbrika talked about doing "a big thing", one of the men responded "like Spain", a reference to the Madrid train bombings in 2004 that killed 191, the prosecutor has said.

Police confiscated bomb-making manuals and videos of beheadings of hostages in Iraq from the men's homes in raids when they were arrested, said the prosecutor.

The trial, now in its second week, is expected to last nine months. (Reporting by Michael Perry; Editing by David Fogarty) (michael.perry@reuters.com; Reuters Messaging: michael.perry.reuters.com@reuters.net; +61-2-9373 1804)

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