Abbott warns of expanding IS reach

Indonesia's ambassador to Australia says his country is working to de-radicalise returning foreign fighters, but has warned that the threat is rapidly rising.

More than a decade after the Bali bombings, the world's most populous Muslim nation is wrestling, like Australia, with how to deal with hundreds of citizens who have travelled to the Middle East to join Islamic State.

The comments from Nadjib Riphat Kesoema came as Prime Minister Tony Abbott warned that Islamic State's tentacles had reached beyond Syria and Iraq, and it had ambitions to establish a province in Southeast Asia.

Mr Abbott opened a two-day Sydney summit on countering violent extremism on Thursday saying that Islamic State, or Daesh, was "terrorism with global ambitions".

"Daesh is coming, if it can, for every person and for every government with a simple message: submit or die," the prime minister said.

Mr Kesoema said the conference was not only vital for the region and "not only important for Indonesia or Australia".

"We have to talk with our neighbouring countries about this and we have to find solutions," he told AAP on the sidelines of the summit.

Mr Kesoema said the threat from Islamic State was "becoming more and more of a concern in Indonesia".

"We try to do our best," he said.

"We try to de-radicalise those people who are coming back."

The prime minister, addressing ministers and officials from more than 30 nations, said that in the past year Islamic State and its imitators carried out attacks in Sydney and Melbourne, as well as in France, Belgium, Canada, Afghanistan, Pakistan, Egypt, Nigeria, Jordan, Denmark, Kenya and the United States.

"The tentacles of the death cult have extended even here as we discovered with the Martin Place siege last December," Mr Abbott said.

Attorney-General George Brandis told delegates governments must be resolute in standing up to groups such as IS, and said countries must not give such groups the legitimacy they seek.

"Through their perverse and wrong interpretation of Islam, they are attempting not only to destroy their own societies, but to divide our communities and to set us against each other," Senator Brandis said.

Executives from Google, Twitter and Facebook are also taking part in the summit which will discuss ways to counter online extremist propaganda.

Foreign Affairs Minister Julie Bishop said it would be a challenge for the government to strike the right balance with plans for laws that would revoke the citizenship of dual nationals fighting in the Middle East, including around ministerial discretion on decisions.

"I don't believe we'll be the only country - certainly not the first and certainly not the last - to consider this question of citizenship," Ms Bishop told a gathering at the Lowy Institute.