Obama urges further coalition efforts against IS?

SYDNEY - Australian police shot dead a teenager they said was a terror suspect after he stabbed two officers, days after sweeping raids involving hundreds of police thwarted what they said was an imminent plot to behead a member of the public.

Australia, a staunch ally of the United States and its escalating action against the Islamic State in Syria and Iraq, is on high alert for attacks by home-grown militants returning from fighting in the Middle East.

Security has been tightened at public places, including Parliament House in Canberra where police are armed with assault rifles, and at major sports events.

The 18-year-old man, who had his passport suspended a week ago, was asked to attend a police station in the southern state of Victoria on Tuesday night because his behaviour was "causing concern", police said.

"This was a planned and agreed meeting that was to occur at the Endeavour Hills police station. When these two police officers approached him, they were stabbed, one very seriously," Victoria Police Chief Commissioner Ken Lay told reporters on Wednesday.

"One of the injured police discharged his firearm, fatally wounding the 18-year-old."

Police said the man had been displaying a flag linked to the militant group the Islamic State at a local shopping mall and had been "of interest" to police for months. Local media reported he had been shouting insults about Prime Minister Tony Abbott and the government before he was shot.

"I can advise that the person in question was a known terror suspect who was a person of interest to law enforcement and intelligence agencies," Justice Minister Michael Keenan told reporters on Wednesday.

Both officers were in a stable condition in hospital on Wednesday, with one undergoing surgery after he was stabbed in the head, stomach and neck.

Earlier this week, Abbott warned Australians the balance between freedom and security "may have to shift", as he outlined broad new powers expected to be introduced to parliament on Wednesday.

"Obviously, this indicates that there are people in our community who are capable of very extreme acts," Abbott said from Hawaii, where he was en route to New York for a meeting of the UN Security Council. "It also indicates that the police will be constantly vigilant to protect us against people who would do us harm."

AUSTRALIA JOINS FIGHT

Australia is concerned over the number of its citizens believed to be fighting overseas with militant groups, including a suicide bomber who killed three people in Baghdad in July and two men shown in images on social media holding the severed heads of Syrian soldiers.

Abbott has said that at least 100 Australians are in the Middle East either fighting with or supporting Islamic State or other militant groups, a number that he said has increased in recent months.

At least 20 are believed by authorities to have returned to Australia and pose a security risk, and 60 people have had their passports cancelled. Earlier this month, the national security agency for the first time raised its four-tier threat level to "high".

Highlighting the threat posed by returning fighters, Australia was swift to commit troops and aircraft to a U.S.-led coalition fighting Islamic State militants in Iraq and Syria earlier this month.

United States and Arab allies on Tuesday bombed militant groups in Syria for the first time, killing scores of Islamic State fighters and members of a separate al Qaeda-linked group.

More than 800 police were involved in a security operation in Sydney and Brisbane last Thursday, which authorities said had thwarted a plot by militants linked to the Islamic State group to behead a random member of the public.