Foreign Minister Julie Bishop says a victory against the self-proclaimed Islamic State in Mosul could create unintended consequences.
"With the Mosul offensive in Iraq, it is likely that foreign terrorist fighters from our region will seek to escape Iraq and come back to Indonesia and Australia, so we'll be talking about our joint efforts to manage the return of foreign terrorist fighters as well as our counter-terrorism operations more generally."
Indonesian authorities estimate more than 500 of its nationals are fighting in the Middle East.
Europe is on high alert, too.
Julian King is the European Union's Security Commissioner.
"We need to redouble, as the minister said, the work we're doing to strengthen the controls that we exercise on our borders, including for EU citizens. And we need to make sure that we're doing everything we can behind our borders through effective co-operation between the different law enforcement and other agencies to tackle that threat - which isn't new. It exists, unfortunately, already."
Julie Bishop says extra resources have been allocated to try to prevent Australians travelling to overseas conflict zones, and joining IS, which is also known as ISIL.
"We have provided more resources, greater legislative power to our security, and intelligence, and law enforcement agencies so that we can prevent Australians from travelling overseas, or indeed, ensure that they don't return to Australia with the intent of carrying out terrorist attacks here. Our message to any Australian thinking of travelling overseas to Syria and Iraq and taking up arms with ISIL is: 'Don't do it!' It's a criminal offence in Australia, but it also adds to the suffering and misery of the people of Syria and Iraq who have been subjected to appalling violence in these conflicts."
The head of the domestic intelligence agency ASIO, Duncan Lewis, says Australians who might be involved with IS in Syria and Iraq are likely to be killed or captured as territory is retaken from the armed group.
"As ISIL'S territory continues to contract, it's expected that many of those Australians that are supporting ISIL in Syria and Iraq will be killed or captured. We also expect a number, including women and children, will return to Australia either voluntarily or due to deportation from neighbouring countries."
He says at least 61 Australians have been confirmed killed in fighting in Syria and Iraq.
ASIO believes about 110 are still thought to be fighting or supporting proscribed groups, and up to 70 children of Australian citizens have been exposed to what he calls extremist groups, there.
Others in Australia, says Duncan Lewis, are being watched.
"ASIO is investigating around 190 people here in Australia who are actively supporting extremist groups in Syria and Iraq through recruiting, fundraising and in some cases seeking themselves to travel to join these groups. This number includes our investigation into about 40 Australians who have returned from the conflict zone."
Mr Lewis says those who do return from war zones can pose a long-term security challenge.
"The long term impact of returnees will be a security issue for this country, for our intelligence, our law enforcement agencies for many years to come. It's important to emphasise that those individuals returning to Australia, who have committed a criminal, terrorist attack can expect to be prosecuted to the full extent of the law. Where evidence may be limited, individuals may be placed under control orders or directed toward de-radicalisation strategies. Either way, these people will be subject to action against them in order to protect Australia's national security."
