The key measures being considered are doubling the number of years of permanent residency from two to four before citizenship is granted and more stringent security checks, including international legal checks, Citizenship Minister John Cobb told Australia's Sky News television.
"Everything is on that table that may be able to tighten our security in an acceptable way," Cobb said.
"We already do conduct checks before anybody is allowed to migrate to Australia in the first place," he added.
"If we need perhaps to look at a longer term of permanent residence before getting citizenship, and perhaps more checks before people are actually allowed to go down that route, well so be it."
Prime Minister John Howard has said Australia, a staunch US ally which has sent troops to Iraq and Afghanistan, is a terrorist target and the country has been on medium level security alert since shortly after the 11 September 2001 attacks on the US.
Australia has never suffered a major peacetime attack at home, but security officials are concerned the country's multi-cultural population may produce "home grown" militants similar to the four bombers who killed themselves and 52 other people when they detonated bombs on 7 July in London.
Australia has never suffered a
major peacetime attack at home
Australian Federal Police Commissioner Mick Keelty said in August that up to 60 suspected militants in Sydney and Melbourne were under surveillance.
Civil liberties campaigners cautioned against stricter citizenship rules.
"This sort of policy could be used to discriminate unfairly against people who the government just don't like because they happen to have visited somewhere or taken some other actions which is innocent and explainable, but doesn't fit the government's policy," said Cameron Murphy, president of The Council for Civil Liberties.