A New York man, inspired by late al-Qaeda cleric Anwar al-Awlaki, was just an hour away from finishing construction on a bomb meant to assassinate US servicemen returning from war and policemen when he was arrested, investigators said.

Jose Pimentel of Washington Heights was granted no bail after he appeared in court late Sunday as details emerged about how investigators say Pimentel became a self-radicalised jihadist.

In the nick of time: New York Mayor Michael Bloomberg attends a City
Hall news conference about alleged lone wolf terrorist Jose Pimente.

Pimentel spent much of his time on the Internet, according to sources, and maintained a radical website called TrueIslam1.

The website allegedly maintained by Pimentel features videos and articles justifying attacks on US army bases, police stations and any building "where money is being made to help fund the war," investigators said. "Before returning to Washington Heights last year, he lived in Schenectady [in New York] for about five years where he made even some like-minded friends nervous by his extremism," NYPD police commissioner Ray Kelly said.

"He talked about changing his name to Osama Hussein to celebrate his heroes Osama bin Laden and Saddam Hussein."

Using instructions from an infamous article called 'How to Build a Bomb in the Kitchen of Your Mom' from the al Qaeda-produced magazine Pimentel planned to use common household items to construct three bombs, investigators said.

"We had to act quickly," Kelly said, because he was in fact putting this bomb together."