Police have reportedly escalated a search for five rocket launchers believed to be buried in Sydney bushland by Islamic State extremists.
The Daily Telegraph reports the weapons have been hidden by a terror cell linked to Islamic State members Khaled Sharrouf and Mohamed Elomar.
They were among ten rockets stolen from a military facility 12 years ago.
Speaking to Seven's Sunrise the Prime Minister Tony Abbott did not confirm the claims, but said the threat of a homegrown terror attack has been building for months.
"We’ve been on the frontline for potential terror attacks for some time," Mr Abbott said.
It comes as Mr Abbott also warns that Australia's involvement in the Iraq conflict could last many months, after announcing the deployment of 600 military personnel to tackle Islamic State extremists.
He said troops are likely to be deployed by the end of the week.
"Barack Obama has not been quick to reach for the gun here, which is as it should be," the Prime Minister said.
A member of the Kurdish "peshmerga" takes his position holding a rocket-propelled grenade (RPG) launcher during an intensive security deployment against Islamic State militants, on the outskirts of the province of Nineveh, August 6, 2014. Photo: Reuters
"The objective is to work with the Iraqi government - we aren't going in against the will of the elected government."
Combat aircraft and special forces advisers will be sent to the United Arab Emirates as part of an international coalition, with Australia receiving a specific request for support from the US government.
Australia's contribution will include up to eight Super Hornet combat aircraft, an early warning and control aircraft and aerial refuelling aircraft.
A Iraqi family who fled recent fighting near the city of Mosul prepares to sleep on the ground as they try to enter a temporary displacement camp but are blocked by Kurdish soldiers. Photo: Getty
A contingent of Special Forces will be sent to potentially act as military advisers to Iraqi and other security forces.
The commitment was a "balanced and proportionate contribution" to the fight against Islamic State (IS), the prime minister said on Sunday.
However, it did not mean Australia was going to war in Iraq.
A decision had yet to be taken to commit to combat operations against IS militants, he said.
"Nevertheless Australia is prepared to engage in international operations to disrupt and degrade ISIL because of the threat that this murderous death cult poses not just to the people of Iraq, not just to the people of the Middle East but to the whole world, including to Australia," he told reporters in Darwin.
News of the deployment comes days after US President Barack Obama ordered a "relentless" war against Islamic State, including air strikes in Syria and expanded operations in Iraq to "destroy" the jihadists.
Mr Abbott warned that should Australia join the fight against IS, the operation could go on for "quite some time".
Search for stolen rockets: Reports the weapons have been hidden by a terror cell linked to Islamic State members Mohamed Elomar (left) and Khaled Sharrouf (right).
"Months rather than weeks, perhaps many, many months indeed," he said.
"Air elements" would depart in the next week, while "military elements" could leave sooner, he said.
The prime minister announced the deployment following a meeting of the national security committee and cabinet, and in the wake of international outrage at the beheading of British aid worker David Haines.
Islamic State claims video shows the beheading of British aid worker David Haines.
Mr Abbott's reaction to the beheading - the third in recent weeks - was one of "shock, horror, outrage and fury".
"The evil and exaltation in evil that was yet again on display today, should make all of us more resolved than ever to do whatever we reasonably can to disrupt, degrade and if possible destroy this movement," he said.
Labor gave bipartisan support to the deployment, but the Greens condemned it as mission creep after Australia's involvement in aid drops and weapons deliveries to Kurdish fighters in northern Iraq.
Opposition leader Bill Shorten described the murder of David Haines as "shocking and sickening".
"Australia has a role to play in eradicating this evil and we are reassured that our support is being provided at the request of, and in full coordination with, the Iraqi Government," he said.
Greens leader Christine Milne said the prime minister was "blindly" following the US into another war in Iraq.
"This an open ended commitment to the United States to send young men and women from Australia into Iraq with no plan, no exit strategy, not time frame, and no definition of success," she told reporters in Hobart.
On Friday, Australia lifted its terror alert level from medium to high, but the government has stressed that does not mean an attack is imminent.
Australia will send combat aircraft and special forces advisers to the Middle East to join an international coalition against the Islamic State in Iraq. Photo: Reuters
Mr Abbott again said the conflict had "reached out" to Australia, with at least 60 Australians fighting with IS and a further 100 supporting extremist groups.
However, he rejected suggestions Australia's growing involvement in Iraq would make it a bigger terrorist target.
"These terrorists and would-be terrorists are not targeting us for what we have done, or for what we might do, they are targeting us for who we are, they are targeting us for our freedom, our tolerance, for our compassion, for our decency," he said.
Morning news break – September 15