The two countries agreed to work together to foster international co-operation on the issue, at high-level AUSTIN talks in Sydney.
Those who study extremist Islamise fighters, say they pose little immediate risk domestically, but some believe that threat is likely to grow if the West takes a more aggressive stance against the Islamic State insurgency.
Reporter: Lexi Metherell
Speakers: John Kerry, US Secretary of State; George Brandis, Australia's Attorney General; Shiraz Maher, International Centre for the Study of Radicalisation in London
LEXI METHERELL: The Government's been preoccupied with the threat posed by Australians fighting alongside extremists in Iraq and Syria.
It raised the matter in yesterday's AUSMIN talks and secured this pledge from the US secretary of state John Kerry:
JOHN KERRY: We intend to join together in order to bring this to the United Nations meeting next month and put it on the agenda in a way that will elicit support from source countries as well as those countries of concern.
LEXI METHERELL: Details are vague but the AUSMIN leaders say the two nations will collaborate to develop best practice measures to be implemented internationally to address the issue of foreign fighters.
The Attorney General George Brandis has told Sky the risk of terrorism in Australia is the greatest it's been in years.
GEORGE BRANDIS: The events particularly in Syria and northern Iraq also pose a very direct threat to our own national security and domestic safety if any of these jihadists return, as some of them have returned.
LEXI METHERELL: But according to one close observer of the jihadist movement, fighters' immediate focus is not on attacking the West but creating a caliphate.
SHIRAZ MAHER: Today all the sort of jihadist rhetoric that's coming out of Iraq, for example, Syria, from groups like ISIS, is telling people to come and join them out there.
Whereas, of course if you look at the kind of message when that was coming out five, six years ago from Al Qaeda preachers, they were saying: stay in the West, attack your home countries, do something there. So that now they've shifted a little bit.
LEXI METHERELL: Shiraz Maher is a senior research fellow at the International Centre for the Study of Radicalisation in London.
SHIRAZ MAHER: They believe that they are engaged right now in the process of state building. So they want you to come out to the caliphate even if you can't fight as a soldier but you have a desire to live under their state. They're saying: Come here. We don't just need fighters. We want judges, we want lawyers, we want mechanics. They want to build the framework of a civil society out there and so they're calling on everyone to come out there and join them.
LEXI METHERELL: Would you say then broadly that in the West particularly the threat of foreign fighters returning and planning attacks is being magnified?
SHIRAZ MAHER: I don't think it's being magnified. That would be the wrong way to look at it. I think it's a sort of threat that will clearly become an issue at some stage. But at this moment in time, it's not at the top of their agenda.
LEXI METHERELL: Shiraz Maher expects Western involvement in quashing the insurgency in Iraq to grow and that that will fuel extremist plans to attack the West.
He supports the AUSMIN proposal to take the foreign fighters issue to the United Nations.
SHIRAZ MAHER: I think the principle of the idea is a good one. Whether it bears any real fruit in the long term remains to be seen. But the idea that all these governments should get together and have a discussion and begin to think creatively about how to suck some of the heat out of this problem I think is legitimate.