Terrorist attack simulation held in Perth

Hundreds of Australian defence force members and police have taken part in a simulated terrorism attack exercise in Perth.

The three-day joint operation was designed to test the ability of Australia's top security agencies to work together during a terrorist attack, said federal justice minister Michael Keenan.

Mr Keenan said Islamic State, with its ability to radicalise people around the world, was the largest threat to the nation's security.

"We must continue to test our capabilities and legislation to meet emerging challenges and ensure our law enforcement and intelligence agencies have the resources and powers they need to deal with this threat," Mr Keenan said on Thursday.

Nine commonwealth and state agencies, including the Tactical Response Group, Australian Federal Police and Australian Defence Force took part in the Maylands operation.