The Morrison government has rejected United States' calls to repatriate home-grown foreign fighters.
Australia has rejected calls from the United States to "take responsibility" for home-grown IS fighters captured in the Middle East.
The US has urged the Morrison government to bring Australian foreign fighters back to the country to be prosecuted or rehabilitated.
But government frontbencher Michael Keenan has pushed back against Washington's advice.
"At the end of the day we work very closely with our security allies, in particular the United States," he told Sky News on Tuesday.
"But decisions about Australia's security are always going to be taken by the Australian government."
Mr Keenan said it was the government's clear position that it would be "very dangerous" to repatriate Australian-born Islamic militants.
"And it's not that straightforward, of course, the idea that you just bring people home and subject them to a criminal trial," the former justice minister said.
"It can be very difficult to get evidence from a war zone that you might need to get a successful prosecution, and our judgment is that in most cases, we are best off excluding these people from Australia."
Several Australian members of the so-called Islamic State are reportedly in the custody of Kurdish forces, who have decimated the terrorist group with help from the US military.
A spokesman for the US embassy in Canberra said repatriating foreign fighters to their countries of origin was the best solution to stop them from returning to the battlefield.
"The US government's policy is to encourage nations to repatriate and prosecute their citizens and take responsibility for their (foreign fighters) through rehabilitation programs or other measures that sufficiently prevent detainees from re-engaging in terrorism," he told AAP.
The coalition government has introduced laws to strip Australian terrorists of their citizenship if they have a second nationality.
It has also introduced legislation blocking Australian foreign fighters who want to return home could be blocked from entering the country for up to two years.
"We believe that community safety here in Australia is best served by making sure they don't return to our shores," Mr Keenan said.