"About 150 Australians have been or are still fighting with opposition groups in Syria and beyond," Foreign Minister Julie Bishop said.
Al-Qaeda splinter group the Islamic State of Iraq and Syria (ISIS) has rampaged across Iraq in the past two weeks and are currently threatening to overrun capital Baghdad. It wants to create an extremist caliphate across the Middle East.
"In Syria it seems that over a period of time they (Australians fighting alongside extremists) have moved from supporting the more moderate opposition groups to the extreme, and that includes this brutal extremist group ISIS," Bishop told Australian Broadcasting Corp.
She said she has cancelled several passports on advice from intelligence agencies, without elaborating whether they were canceled to prevent people leaving or returning home.
Immigration Minister Scott Morrison had said the government is looking at its options in relation to cancelling the visas or revoking citizenship for dual nationals who have fought alongside extremists.
Bishop welcomed the Iraqi prime minister's call for national unity, saying "we need to see a political solution because a military solution could be catastrophic."
Australia sent 2,000 troops to support US and British forces in the 2003 Iraq invasion.
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