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Minister for Immigration Scott Morrison has rejected concerns by Australia's top Islamic leader that the planned military deployment to the Middle East will only succeed in inflaming the terrorist threat.
The comments came as leaders expressed outrage at the most recent beheading of an English aid worker David Haines by Islamic State militants.
Mr Morrison, who appeared on The Bolt Report on Sunday, rejected claims by Australia's Grand Mufti that the Abbott government would be to blame for creating more Muslim radicals at home if it sent troops to the Middle East.
The Australian National Imams Council and Ibrahim Abu Mohammed said on September 3 that "one of the main causative factor [sic] for local radicalisation in the west has been the western governments' military involvement in the Middle East".
"I don't accept those comments and Australia will always act in our national interest," Mr Morrison said.
Mr Morrison said the Abbott government's decision to join the US in Iraq was not the reason why the country's terrorism threat level was suddenly raised last week.
"I think that view fundamentally misunderstands Australia's situation," he said. "Australia has always been seen as a legitimate target by terrorists and extremists because of who we are and what we're about and what we represent.
"We need to act in our interests, we can never be intimidated by terrorists and extremists, and I know that the Australian community strongly supports a very strong stand on this in standing up for our values and our way of life."
Meanwhile, Prime Minister Tony Abbott condemned the murder of Mr Haines.
"Shock. Horror. Outrage. Fury," he said. "And a steely resolution to do whatever we reasonably can to tackle this absolutely unprecedented development.
"The evil and the exaltation in evil that was yet again on display today should make all of us more resolved than ever to do whatever we reasonably can to disrupt, degrade and, if possible, destroy this movement.
"As I say, it's never to be called by me Islamic State because it's neither a state nor Islamic. It's a death cult, and we should call things for what they are."
Opposition Leader Bill Shorten said it was" a deplorable act of evil". "My heart goes out to the family of the aid worker who is on this video," he said.
US President Barack Obama has vowed to hunt the people responsible for the act no matter how long it takes.
Meanwhile, an internal Australian Defence Force memo, circulated just 48 hours before Australia's terrorism threat level was raised to high last week, has apparently detailed an incident in which a group of men threatened to blow the "head off" an ADF member in Sydney if he went to Iraq to fight the IS.
According to the Sunday Telegraph, the ADF member was approached by the group of men and told to "go to the Middle East so we can blow your f---ing head off you c--t."
The memo detailing the incident was sent to army officers to warn them of an increase in anti-defence sentiment in Australia as a consequence of operations in the Middle East.
The Department of Defence declined to comment, saying the memo sent to defence personnel was created for official use only.
