Australia has raised its terror threat level to "high" from "medium", saying there is an increased likelihood of an attack at home, despite stressing it has no knowledge of a specific plan.

Australia has repeatedly raised the alarm about the number of its citizens believed to be fighting with armed groups in the Middle East, including a suicide bomber who killed three people in the Iraqi capital Baghdad in July and two men shown in images on social media holding the severed heads of Syrian soldiers.

According to Australian officials, up to 160 people have either been involved in the fighting in Iraq and Syria or actively supporting armed groups, but this is the first time Australia has issued a high alert.

David Irvine, the director-general of the Australian Security Intelligence Organisation (ASIO), flagged the prospect of lifting the threat level on Tuesday, saying the number of Australians returning from fighting with the Islamic State and other armed groups posed a growing risk.

Security agencies say that number is at least 20.

Australia moves against fighters in Syria

"Last night the director general of security raised the terror threat to high, consequently today the government is raising the public awareness level to high," Tony Abbott, the Australian prime minister, announced in Melbourne on Friday.

"I want to stress that this does not mean that a terror attack is imminent. We have no specific intelligence of particular plots. What we do have is intelligence that there are people with the intent and capability to mount attacks here in Australia."

Australian police on Wednesday arrested two men suspected of helping Australian citizens fight alongside armed groups in Syria on terrorism-related charges.

Australia had been at the "medium" alert level since a four-tier system was introduced in 2003.

A "high" alert level is used when officials believe an attack is probable, while a "severe" level threat means they believe an attack is imminent or has occurred.

The UN Security Council is planning to demand countries "prevent and suppress" the recruitment and travel of foreign fighters to join fighters' groups such as the Islamic State ensuring it is considered a serious criminal offence under domestic laws.

Source: Agencies