Australia on Tuesday announced it will amend the law to strip dual nationals linked to terrorism of their citizenship for "betraying the country", but insisted no one would be left stateless.

Prime Minister Tony Abbott said the new powers would apply to dual nationals who fight with or support jihadists such as Islamic State group or so-called lone wolves who pose a threat on home soil.

But the government backed away from removing citizenship from second-generation Australians. Under that scenario, such nationals linked to terror groups would have been forced to take on the citizenship of their parents' birth countries.

"The changes will be consistent with our international legal obligation not to leave a person stateless. There will also be safeguards, including judicial review, to balance these powers," said Abbott.

"These new powers are a necessary and appropriate response to the terrorist threat. They modernise our laws and bring them closer to those of Britain, Canada, France, the United States and other countries."

The announcement came as a Sydney mother reportedly abandoned her two children and fled to Syria for a new life under Islamic State, becoming one of more than 100 Australians who have joined the jihadists. At least 30 have been killed.

The government said it was deeply disturbed by the revelations and was monitoring the situation closely.

The Sydney Daily Telegraph said Jasmina Milovanov, a 26-year-old Muslim convert, left her children, aged five and seven, with a babysitter earlier this month and never returned.

It cited her ex-husband as saying she sent a text message telling him she was in Syria.

"The only thing I can think about is my children. I can't believe she left these two beautiful children. My son was saying in the days afterwards that he hoped 'my mum is OK'," said the husband, who was not named.

"Before she (went) I talked to her (about her extreme Facebook posts). I said this is extreme, stupid. I was warning her about who she hangs out with."

- No leniency -

Milovanov is Facebook friends with former Melbourne woman Zehra Duman, who is known in Australia as the "jihadi bride recruiter" and uses social media to entice women to join the militant group.

Friends of Milovanov, cited by the Telegraph, said she had often talked about marrying a jihadi fighter.

Australia raised its threat level to high last September and has since carried out a series of counter-terrorism raids, with several alleged plots foiled this year.

Canberra has also introduced a series of national security measures to combat the threat, including criminalising travel to terror hotspots and allocating Aus$1.3 billion (US$1.01 billion) in extra funding to police and security agencies.

Abbott said people who chose to fight with the Islamic State group were "betraying our country and don't deserve to be citizens of Australia".

"Our success as a nation is underpinned by a commitment by all Australians to a law abiding, peaceful and open society.

"In an environment in which terrorism is reaching out to our community, we need to ensure this is well understood," he added.

Abbott also vowed no leniency for returning jihadists who are Australian citizens only.

"They should suffer the full severity of the law, if they get back alive," he said, adding that around half of the 100 citizens fighting overseas were dual-nationals.

The government plans to introduce the new legislation into parliament within weeks with the decision to strip citizenship at Canberra's discretion.

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