Terrorist reportedly killed as laws pass

Fugitive terrorist recruiter Mohammad Ali Baryalei is believed to have become the latest Australian killed in the Islamic State (IS) conflict in the Middle East.

The death of the former Sydney nightclub bouncer turned high-profile terrorist was seized on by the government as evidence that intelligence and law enforcement agencies need tougher powers.

Baryalei, the most senior Australian member of IS, reportedly died four or five days ago.

"We are currently seeking to confirm whether the 16th Australian foreign fighter has indeed been killed in this conflict," Foreign Minister Julie Bishop told parliament.

The news came as Labor joined the coalition to pass foreign fighter laws.

Prime Minister Tony Abbott said the laws would make it easier to arrest and jail terrorists returning from overseas, monitor potential terrorists in Australia and stop "preachers of hate".

As news filtered through of Baryalei's apparent demise, the neighbours of his parents in Sydney's northwest spoke about his mother's pain over her son's decision to join the radical group.

The neighbour said Ms Baryalei had been devastated by her son's decision to take up arms with IS.

"She was crying. She couldn't believe it was her son," she said.

"All she knew was he was overseas studying to be a cleric and would call her every so often.

"He was very protective of his mum."

News of Baryalei's death was tweeted by a British-based researcher Shiraz Maher and soon after, a friend of Baryalei's posted on Facebook that the terror leader had been "martyred".

"I've just received the news that our beloved brother Mohamed Ali who was recently strongly attacked by Australian media has been martyred," Abdul Salaam Mahmoud wrote.

Intelligence agencies believe Baryalei has recruited as many as 30 of the 60 Australians now fighting alongside IS forces.

Authorities believe he conspired with Sydney man Omarjan Azari in a plot to execute random members of the public in Australia.

Azari, 22, was arrested in counter-terrorism raids last month.

Before he fled to the Middle East, Baryalei was a leader in the "Street Dawah" movement in which members preached their puritanical version of Islam on Sydney streets.

He was also a nightclub bouncer in Kings Cross and had a small role in the Nine Network's Underbelly series, appearing as a paramedic.

Mr Abbott told parliament the terrorism threat was a serious challenge.

"What we are seeing every day, is new exhortations on the internet urging fanatics to murder everyone and anyone who acts or thinking differently from them," Mr Abbott said.

Ms Bishop said the third tranche of anti-terrorism laws - dealing with the retention and access to metadata - would help authorities pursue terrorists.

Greens senator Penny Wright said the foreign fighter laws would weaken the rights and freedoms that sustain democracy.