Abdullah Al-Taay was granted bail at Sydney's Downing Centre Local Court on Thursday a day after being arrested.
Abdullah Al-Taay walked out of the prison, obscuring his face with a green jumper.
The 23-year-old faces four charges of stalking or intimidating the teens with intent to cause fear of harm over the incident in the eastern-city suburb of Bellevue Hill on Monday.
He is accused of verbally threatening the teens about an Israeli flag they were about to drape over their car.
On Thursday, prosecutors said there were concerns Al-Taay could pose a risk to the community given the allegations involved threats to young people and he had been previously convicted of assault.
However, proposed bail conditions agreed to by the 23-year-old's lawyer Elie Srour mitigated those risks, the court heard.
Al-Taay watched the hearing by video link from Amber Laurel prison in western Sydney.
Magistrate Julie Huber granted him bail, ordering him to reside at an address in Glen Alpine, remain under a nightly curfew and refrain from attending any protest or rally.
He will also be barred from a number of suburbs in Sydney's eastern suburbs that are home to large Jewish communities unless he is there for work.
Al-Taay walked out of the prison on Thursday afternoon, obscuring his face with a green jumper when he was being photographed.
The matter will return to court on October 27 when a plea will be made.
A controversial pro-Palestine rally was held at the Sydney Opera House on Monday night as the iconic venue was lit up in the colours of the Israeli flag.
Further protests are planned in Sydney and other major cities on Sunday, while vigils have been held by the Jewish community in response to events in Israel.
More than 1200 Israelis have been killed in Hamas attacks, while over 1000 Palestinians are believed to have died in retaliatory airstrikes in Gaza.
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