The black flag and decapitated head covered with Arabic writing found following a French factory explosion are consistent with recent terrorist attacks, Australian Foreign Minister Julie Bishop says.
Ms Bishop says it is another reminder of the need to be vigilant about the possibility of a terrorist attack in Australia.
A suspected Islamist attacker pinned the decapitated head covered with Arabic writing to the gates of a gas factory in eastern France after setting off several small explosive devices.
"If the early reports are true, this is another horrific reminder of the brutality of these terrorist organisations that are attacking civilians in a most violent and barbaric way," Ms Bishop told reporters in Melbourne on Friday night.
The minister said the early reports appeared to be correct and indicate that it was a terrorist attack.
"There is an indication that a black flag with Arabic writing was found near the scene and that there was a decapitated head," she said.
"That would be consistent with other terrorist attacks that we've seen in recent times.
"It is a grim reminder of the horrific nature of these terrorist attacks and we must be ever vigilant to ensure that this doesn't happen in Australia."
Ms Bishop advised Australians in France to contact the Australian embassy if they were concerned.
"But I don't believe that there's any evidence that this is a widespread matter. It seems to be isolated in the southeast of France."
Ms Bishop said about 1000 French nationals had taken up the terrorist cause in Syria and Iraq.
"France has been on alert for some time and if these reports are true it is a very horrific reminder of the kind of damage and destruction that terrorists can cause."
Australia's ambassador to France Stephen Brady was being briefed on the incident by the Interior Ministry in Paris on Friday night (AEST) and was expected to provide a further update to Ms Bishop.
Opposition Leader Bill Shorten said he condemned the "cowardly act of murder", adding that the French people had endured more than their share of tragedy in the past year.
"Australia stands in solidarity with our friends in France tonight, and against the global threat of terrorism," he said in a statement.
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