A more open and Australian version of Islam will evolve to differ from the more traditional approach in the Middle East and other parts of the world, Treasurer Scott Morrison says.
As a number of prominent Liberal MPs joined Resources Minister Josh Frydenberg in calling for Islam to change, Mr Morrison predicted the Australian Muslim community would become "indigenised".
"The cultural representation of Islam in the Middle East is different to what it is in Malaysia, in Indonesia, or Africa or different parts of the world," Mr Morrison said on Monday.
"One of the things that happens to religions over time in Australia is they become more Australian and ... by that I mean the cultural values of Australia determine a lot more of their local practices."
Mr Morrison later told reporters that Australia had "an overwhelming cultural set of values" that always had an influence over time, and which would lead to "a more accessible and a more open and transparent way of doing things (within Islam)."
His comments came as former SAS commander turned federal government MP Andrew Hastie backed Mr Frydenberg's remarks at the weekend that Australia must recognise the "significance" of the threat posed by IS and that there was "a problem within Islam".
"Modern Islam needs to cohere with the Australian way of life, our values and institutions. In so far as it doesn't, it needs reform," Mr Hastie told the Herald-Sun on Monday.
But a respected US expert on Islam says the narrative that a "problem within Islam" is to blame for the recent terror attacks only legitimises groups such as Islamic State and helps it recruit followers.
Professor John Esposito, the founding director of the Prince Alwaleed Bin Talal Center for Muslim-Christian Understanding at Georgetown University in the United States, said Western governments were "yielding to a fear that is not proportionate to the actual threat itself".
"When you get those narratives it legitimises the kind of violence that actually exists," he told AAP.
"Maybe some of those who are the Islamophobic politicians etc, they may not engage in violence but the rhetoric they put out there creates a world in which you then have the kinds of attacks that they suggest."
He earlier told a conference on Islam in Sydney that "one of the things that does wind up alienating some youth is the extent to which anti-Muslim and anti-Islamic diatribe ... make people feel alienated and marginalised".
Greens leader Richard Di Natale said it was disappointing some conservative MPs were using the Paris attacks to create division in the community.
"The issue here isn't Islam - it's those individuals who seek to cause violence and inflict suffering on people as a result of their own warped world view," he told reporters in Canberra.