Prime Minister John Howard said that these "threatening" times required "a strong and comprehensive response."
On Tuesday, the heads of the governments of Australia's states and territories agreed to back Mr. Howard's proposals for tough new anti-terror laws. The proposed legislation will allow terrorist suspects to be electronically tagged or held in custody for up to two weeks without charge. Other changes include tighter checks on citizenship applicants and jail terms for inciting violence. Airport security will also be upgraded.
However, some Muslims in Australia fear the laws would mean they could be unfairly targeted by the police, who will have greater powers to stop, search and question suspects. Islamic groups are worried that these new laws could cause more religious intolerance.
Prime Minister Howard has tried to allay these concerns.
"I simply say to my fellow Australians who are Muslims: you have nothing to fear from these laws," he said. "They are not directed at you. They are directed to protect you. Law abiding Muslims have as much at stake as law abiding Christians or law abiding atheists or law abiding Jews or law abiding Hindus. We're all in this together."
Mr. Howard needs the support of state leaders to ensure the new laws are enforced uniformly across the country. He agreed that the laws will be reviewed after five years and they would need to be renewed after a decade.
There has never been a major terrorist attack in Australia. However, some security analysts think that Canberra's decision to send troops to Iraq has made this isolated continent more of a target.
Australia has around 1,400 military personnel in the Persian Gulf.
Moves to toughen Australia's counterterrorism laws have intensified since the London bombings in July.