Thousands of Shia Muslims have taken part in an annual procession through Sydney, vowing they will not be intimidated by Islamic State supporters.
The prime minister says the shooting of a religious leader outside a Sydney prayer hall seems to have been influenced by Islamic State ideology.
Tony Abbott has told reporters in Sydney it's important to absolutely reject the ISIL death cult influence.
"Obviously we saw the attack on two policemen in Victoria a month or so back," he said. "It seems there is an ISIL death cult influence on this shooting in Sydney in the last 24 hours or so.
"The important thing is for all of us to absolutely reject this death cult."
Religious leader Rasoul al-Mousawi received pellet wounds to his face and shoulder outside a prayer hall in Sydney's southwest early on Monday morning.
He is expected to undergo surgery on Tuesday.
The Shia Muslim centre in Greenacre allegedly received threats from IS supporters just hours before the attack.
Police say the 47-year-old was standing with his family outside the gated building just after 1am when shots were fired.
Organisers of a Sydney procession of Shia Muslims condemned the shooting and have vowed not to be intimidated by the extremist group.
"I had no intention of coming but when I saw the clip on television yesterday I said I have to stand against this," Imam Sayed Moustafa al-Qazwini from the Islamic Educational Centre of Orange County told SBS.
Thousands of men, women and children took part in the annual Ashura march from Hyde Park to the Royal Botanic Gardens.
The procession marks the anniversary of the murder of Imam Hussain, who was killed alongside his family in Iraq 1300 years ago because he refused to pay allegiance to the tyrant of his time.
One of the speakers, Basim Alansari, said the rally was not just to commemorate Hussain but also to reflect on recent events.
"We are seeing Islam being hijacked again by ISIL (another name for Islamic State), but we are here to show that we are part of Australia and we share Australian values," he said.
Hussain Abbas, who also took part in the rally, said the Shia Muslim community wanted to show it would not be intimidated.
The Ashura Australia procession has been taking place in Sydney for the past 11 years to promote the message of peace and unite against oppression and injustice.
Police estimated about 2000 people took part in the march.