Defence Minister Najib Razak said on Friday that the country could not repeal the act because of continuing concerns over "terrorism".
He said while Malaysia may not be an explicit target, the government was concerned a number of its citizens have been identified as key players in regional "terrorist" organisations.
"It is also possible that these groups have used Malaysia as a transit point for their more lethal activities elsewhere. It is therefore critical for our security forces to remain vigilant in ensuring that we do not become a launching pad or target for the cowardly acts of such groups."
However, Razzak added the government believes it has taken a "balanced and reasonable approach, and is open to a review of the ISA in an orderly manner".
"It is... critical for our security forces to remain vigilant in ensuring that we do not become a launching pad or target for the cowardly acts of such (terrorist) groups"
Malaysian defence minister
The ISA was originally designed to combat a communist rebellion half a century ago.
It allows for the detention without trial of any person considered to be a potential threat to national security or public order.
Those arrested by the police under the act can be detained for up to 60 days for investigative purposes.
During this period, human rights groups say detainees have been subjected to ill-treatment and held incommunicado without access to lawyers, families or independent doctors.
After 60 days, the home minister may hand down a two-year detention order which is renewable indefinitely.
More than 80 suspected Islamists are currently being held under ISA provisions, with a number of them allegedly members of the Jemaah Islamiyah (JI) group.
Tim Parritt, a south-east Asia researcher for human rights group Amnesty International, said there is a lot of opposition in Malaysia to the ISA.
"A lot of people are saying the act has been misued and is targeting members of the political opposition, social activists and so-called religious deviationists. The problem is that the judiciary simply cannot check the executive's decisions."
"If these people really are a threat to national security they should be charged and tried in public"
Parriitt added that Amnesty is calling for the repeal, or at least a review, of the act.
"In the past the Malaysian government has expressed willingness to review the ISA but nothing has been done. But all people have the right to defend themselves.
"If these people really are a threat to national security they should be charged and tried in public. In the long term, if Malaysia undermines certain fundamental rights it will be creating a whole host of new problems for itself."