Wassim Haddad is sitting across from us, dressed in a dun-coloured shalwar kameez, pulling habitually at his shaggy beard as we drink coffee and he doesn’t. Ramadan, the month of fasting, has just ended but Haddad is abstaining for a further six days because, he explains, come the Day of Reckoning a whole year of sins will be forgiven for his additional days of piety.

We’ve been chatting for a while when he slants his phone screen our way. It’s a video sent by his good mate Khaled Sharrouf, 32, who went to school not far from here at Chester Hill High. Sharrouf, like Haddad, is Australian born, the son of Lebanese migrants. In the video, Sharrouf, a solid, overweight man, is dressed in combat gear and a pair of green fluorescent runners. In his hand he carries a pistol. On the ground in front of him is a row of kneeling men, their hands tied behind their backs with checked keffiyeh scarves. They are Iraqis — possibly soldiers, possibly police, possibly just government workers such as primary school teachers.

Sharrouf walks up behind one of the men and points the pistol at the back of his head as other gunmen do likewise. He stiffens his grip on the pistol and … Haddad angles the screen away. “I think you know what happens next,” he says without any great emotion. We do. Sharrouf, from Wiley Park, Sydney, pulled the trigger and blew the man’s brains out through his face. Then he sent the video to his mates in Sydney.

In the video Sharrouf’s friend Mohamed Elomar, 30, also from Sydney’s west, can be seen limping on crutches. Elomar, who in 2003 was on a boxing scholarship at the Australian Institute of Sport, was shot in the knee a few months earlier. Elomar posted his X-rays to his Twitter account.

“Getting shot in the knee freaking hurts dude,” he tweeted to one of his mates. “It’s like getting hit by a Mack truck.” This is a war where the combatants are also the correspondents.

In December last year, Sharrouf, who is on a terrorism watch list and has had his passport seized, slipped out of Australia using his brother’s passport. Elomar left about the same time. The pair met up in Malaysia and then travelled together to Turkey where they sneaked across the border into Syria to join fighters from the Islamic State of Iraq and Syria, now known as Islamic State, which is waging a brutal war on two fronts, against Syrian and Iraqi forces, with the aim of establishing an Islamic caliphate, just as the Taliban did in Afghanistan.

Late in July, shortly after Sharrouf’s execution video was taken in Iraq, the pair headed west, returning to Syria, where in a daring manoeuvre the Islamic State forces attacked a Syrian army base, Division 17, near the eastern city of Raqqa. Reports say the attack began when two Saudi suicide bombers simultaneously detonated bombs on the perimeter of the base. There was fierce fighting for many hours before the Islamists overran the base.

This relatively insignificant battle in a long and bloody war may have gone unnoticed by the rest of the world but for what happened next. The Islamic State forces beheaded many Syrian soldiers they had captured. In a macabre ritual reminiscent of medieval times, or an episode of Game of Thrones, the heads were impaled on steel spikes in the town’s main square. Sharrouf took to Twitter. He posted photographs of his grinning mate Elomar holding the heads of two slain men in either hand, like a pair of freshly slaughtered fowl.

In the days after these photos were posted we are sitting in the Golden Bean in Bankstown talking to Haddad. He spoke to Sharrouf just a few hours ago. Sharrouf, he says, is happy, ecstatic. “He says that he loves what he is doing over there,” explains Haddad, who runs the hardline al-Risalah Islamic Centre in Bankstown, which Sharrouf and Elomar had attended.

“He says he is doing the work of Allah in establishing an Islamic caliphate. He is enjoying himself. It is something he has always wanted to do. Why wouldn’t he be happy? He is fulfilling his obligations to Islam. He pretty much called us (other Islamic youth in Sydney) cowards for not being there.” Dozens more would follow, Haddad reckons, but they have had their passports seized by ASIO.

On the outskirts of Sydney at Denham Court there is an enormous house with Arabian horses grazing in the surrounding paddocks. Inside the house lives a good man with a broken heart. His name is Mamdouh Elomar. He and his brothers escaped civil war in Lebanon in the early 1970s and went on to build a very successful engineering business, Lifese Engineering.

The Auburn-based company has worked on projects as diverse as providing the steel work for spires on Sydney’s St Mary’s Cathedral to a contract to build part of the $1.3 billion Gold Coast desalination plant. Former NSW attorney-general John Dowd is the chairman of the company.

Mamdouh Elomar could make a success of business, but he could not steer his two older sons, Ahmed and Mohamed, away from hardline Islamist views.

“He is very shitty with them,” says the family lawyer, Adam Houda, “like big time. But they are interesting guys. Their dad is a very wealthy man and yet they are willing to sacrifice everything to help people, even if it means their life. I find them interesting in that regard. They are set. That is how passionate they are about it.”

In 2007 Ahmed travelled to Lebanon for a holiday where he was arrested for allegedly linking up with a terrorist organisation. He was believed to have been tortured in jail. His father flew to Lebanon and used every connection he had to successfully secure his son’s release. At the time Mamdouh Elomar gave an interview to journalist Taghred Chandab.

In that interview he urged his children to stay away from Sheik Feiz Mohammed and the Global Islamic Youth Centre in Liverpool, Sydney. “Sheiks like Feiz ruin people,” he told Chandab. “He is not a sheik; he is brainwashing all these children. I know my religion, so I can tell him when he is wrong, but these kids believe everything he says and think it’s their religion. Someone needs to stop him.” It didn’t work. It seems their uncle, Mohamed Elomar Sr, had more of an influence on the boys than their father. Mohamed Sr is a convicted terrorist.

He was once a draftsman in the family’s engineering business before becoming involved in radical Islam and assuming the role of ringleader in Australia’s largest ever terrorist plot, known as the Pendennis plot.

Pendennis was a sprawling terror conspiracy involving 18 men in NSW and Victoria. For more than a year NSW and Victorian police, the Australian Federal Police and ASIO monitored the group.

When they swooped in 2005 they found the men had stockpiled 28,000 rounds of ammunition, a dozen guns, chemicals, bomb-making recipes, timers, batteries and a trove of jihadist material including beheading videos and extremist preachings. Eighteen men were convicted and sentenced to lengthy prison terms, including Mohamed Sr, who got 21 years without parole. Sharrouf, considered by police to be a foot-soldier, served three years and nine months. His sentence was drastically reduced because of his mental capacity. He was diagnosed at an early age as “a chronic schizophrenic” probably exacerbated by heavy drug use in his teens.

When the police came for Sharrouf in 2005 he was living in a cul-de-sac, in Sydney’s western suburbs with his wife, Tara Nettleton, an Anglo-Australian, and their three young children. The pair had met at Chester Hill High.

Sharrouf came from a troubled background. When he was in his early teens his father abandoned the family and returned to Lebanon, leaving his mother to care for Khaled and his siblings. At high school Khaled ran with a local gang called the Dandans, according to school friends — he had a string of minor convictions and was a heavy user of amphetamines and LSD. He was expelled for bashing another student in Year 9.

Nettleton, too, was apparently a wild girl at school. Classmates recall her openly talking about having sex and smoking pot at an early age. Sharrouf is two years older. He re-embraced his faith in an attempt to turn his life around. She converted to Islam. People say she took to her new religion with a zealot’s fervour.

The pair married and moved to quiet Bradley Crescent in Wiley Park. Neighbours this week recalled how Sharrouf’s friends would come knocking on the doors at all hours of the night. They also recalled seeing groups of men praying on the lawn in the front yard. Tara could be friendly, they say, but Khaled was aloof and intimidating.

Tara was a pretty woman, but whenever there were men around she would cover up. Joyce Spedding, an elderly woman, who lives next door, says she saw Tara in the front yard one day wearing the all-covering niqab. “I said to her, ‘You’re too pretty to wear those things.’ That was the wrong thing to say. She turned on her heels and went inside and never spoke to me again from that day on.”

For a year police monitored Sharrouf’s every move; they tapped his phone and planted listening devices throughout his house. Former NSW detective Peter Moroney was one of the officers who eavesdropped on the Sharroufs. He says Khaled put considerable pressure on Tara to stop her mother, Karen, from seeing her grandchildren because she was a kafir, a non-Muslim.

Tara’s father, Peter Nettleton, tells us that Karen stayed close to their daughter throughout her marriage to Khaled, and supported her decisions. He says that when Tara was in high school she fell in with the wrong crowd and that Sharrouf helped pulled her out of it.

“That’s how he won her over, by looking after her in the very first instance.”

Peter Nettleton says the family tried to steer Tara away from Khaled, but Tara wasn’t for turning. “She went his way and didn’t want to know us any more. We tried to reach out, but she was — what’s the word I can use? — she was probably possessed. She was brainwashed.”

Nettleton, who is divorced from Karen, hasn’t spoken to his daughter in seven years. Like Mamdouh Elomar, he is a heartbroken father, a stranger to the life his child has chosen. “There’s not a day goes by that I don’t think about it,” he says.

Ten years on, Sharrouf’s neighbours in Bradley Crescent still recall the night police choppers swirled overhead and the street was clogged with patrol cars. They never saw Khaled again and Tara soon moved out with the kids. In sentencing, judge Anthony Whealy made note that Sharrouf’s psychiatrist, Olav Nielssen, thought he was “unlikely to become involved in a further offence of this kind”. Tara wrote a letter to the court saying how she and Khaled had discussed that when he was released they would move to the country to lead a quiet life on a farm and and raise their kids away from trouble. “He just wants to stick to himself and stay out of trouble,” she wrote. It wasn’t to be.

After Sharrouf was released from jail in October 2009, he soon became friendly with the brothers, Ahmed and Mohamed, the nephews of Mohamed Elomar Sr, Sharrouf’s fellow plotter. Lawyer Houda says he would see Sharrouf and the Elomar boys at the Body Punch Gym at Lakemba. The Elomars would box while Sharrouf hit the weights. The Elomars are talented, ferocious fighters, both Australian champions.

Ahmed fought on the undercard on the biggest fight night in Australian history, when Anthony Mundine took on Danny Green at Aussie Stadium. Ahmed made a dramatic entrance to the ring on the back of a white Arabian horse. The boys were also into bull riding.

Friends say Ahmed, the older of the two, is an uncompromising character. “If you gave him your word about something, even something relatively minor, and then you didn’t follow through he would be immensely insulted,” an acquaintance says. “That would be it — he’d have nothing to do with you again. He is hardcore. Intense.” Mohamed, on the other hand, is more laid-back.

Ahmed seems to have been particularly affected by the jailing of his uncle. Mohamed Sr had trained him and his brother. Ahmed regularly turned up to court to hear the proceedings and one day in 2005, outside the courtroom, he told journalist Robert Wainwright that he did not believe the terrorist allegations against his uncle. “My uncle is not like that. It’s upset the whole family. You live in a good country, you’ve got kids, you’ve got jobs. Why would you do something like that?”

But from that point on, he and his brother became increasingly radicalised. And two years later he was arrested in Lebanon, accused of plotting with terrorists. Ahmed was supposedly tortured in a Lebanese jail, but this only seemed to harden his resolve. His brother followed his lead.

In December 2011, Ahmed Elomar and Sharrouf had their vehicle parked-in at a Bankstown parking lot by a local restaurateur. They burst into the restaurant and threatened to shoot the man and burn down his shop. Ahmed then punched him twice in the face and Sharrouf joined in.

And then, in January 2012, Ahmed was at it again, this time with Haddad from the al-Risalah Islamic Centre. A Shia man opened a juice store in Bankstown. According to reports, Haddad and Ahmed Elomar accused him of being a supporter of the Syrian dictator Bashar al-Assad. Haddad demanded he donate money to help the rebels in Syria. When he declined, 20 men, led by Ahmed Elomar, attacked him. Ahmed held him by the throat and said, “We are going to burn the shop down.” Others threatened to cut his throat. The intimidation continued and the man was forced to sell the juice bar, which had cost him $80,000 to set up, for just $10,000.

A few months later Ahmed was seen carrying a placard on a wooden pole — “Our dead are in paradise, your dead are in hell’’ — at a Muslim protest against an online video deriding the Prophet Mohammed. One of his fellow protesters punched a police officer and while he was on the ground Ahmed Elomar smashed him hard over the head with the pole.

He is in jail until March 2016. It was his younger brother, Mohamed, who would go off to fight the holy war to establish a Muslim caliphate on Arab soil.

Houda says he cannot abide the barbaric acts of Sharrouf and Mohamed Elomar, and that it is un-­Islamic to disrespect the dead. But, he says, they are fulfilling what they believe to be their duty.

“People have been outraged that in the last 20 days a few hundred people have been killed in the Gaza Strip — during that same period 1500 kids were killed in Syria,” he says. “Any sincere person would be outraged. Muslims are taught that if another Muslim is suffering you have to come to their aid and help, because their suffering is your suffering.”

Houda insists that their intentions are pure and that both of them are good men doing what they believe is right.

Haddad says they have rejected what their parents have strived for, a quiet life in Australia.

“The older generation, my parents, they can’t understand,” he says to us in the Golden Bean Cafe. “They say, ‘This country has done everything for you. You get free schooling. You get Centrelink. You get Medicare. You get free health services. You can pray when you want. This country has done everything for you, for us.’

“That generation, they came from war,” he continues. “They fled the fighting. Now they carry with them a defeated mentality. They were called wogs when they arrived and they accepted it because they were defeated. They just wanted to blend in. We don’t see it that way. We have come back to our true religion. It frees us up from that grip of defeat.”

He says the only reason his parents’ generation was let into Australia in the first place was to weaken Muslim countries.

“It was to stop Muslim dominance. But we are rising up. There is a saying in Islam: ‘The youth are the spark of the fire’.”