Malcolm Turnbull has vowed not to "let anger cloud our judgment" in the wake of the Paris attacks as he confirmed Australia would not step up its military response to the fight against the Islamic State terror group.

In a major national security speech to the Parliament, Mr Turnbull sought to reassure Australians that while a terrorist attack remains likely on home soil, Paris has not materially changed the threat here.

Mr Turnbull said the heads of ASIO and the Australian Federal Police had advised there was "no evidence" that the recent wave of global terrorism including the Paris attacks "will materially affect the threat level in Australia".

Still, he has asked law enforcement agencies to test their responses to mass-casualty attacks.

Mr Turnbull announced the long-awaited overhaul of the terror alert system in Australia would commence this week to provide more detail on the nature of threats. He also warned that the hundreds of thousands of Australians who travel each year to south-east Asia faced a heightened threat that requires more intelligence sharing with regional neighbours.

But overall he painted a picture of an adversary that is fundamentally weak – despite the militant group maintaining a firm grip over key strategic territory straddling Syria and Iraq.

In contrast with his hawkish and sometimes rhetorically inflammatory predecessor Tony Abbott, Mr Turnbull urged a calm and careful response to the Paris attacks.

"We should grieve and we should be angry, but we must not let grief or anger cloud our judgment," he said. "Our response must be as clear-eyed and strategic as it is determined.

"This is not a time for gestures or machismo. Calm, clinical, professional, effective - that's how we defeat this menace."

Rather than a stronger military response – which Mr Abbott and some supporters have urged – Mr Turnbull emphasised the strength of multicultural societies as pivotal.

"We will defeat these terrorists," he said. "And the strongest weapons we bring to this battle are ourselves, our values, our way of life.

"Our unity mocks their attempts to divide us. Our freedom under law mocks their cruel tyranny. Our mutual respect mocks their bitter intolerance. And the strength of our free people will see off these thugs and tyrants as it has seen off so many of their kind before."

IS 'fundamentally weak'

He also hinted that to overreach militarily would play into the Islamic State's hands as it sought to fuel Muslim resentment against the West.

"Strategically, ISIL wants to create division by fomenting resentment between non-Muslim populations and Muslims."

Noting that the Iraqi government had not agreed to having Australian special forces operate "outside the wire" of bases, the Prime Minister also noted that Baghdad "believes that large scale Western troop operations in its country would be counterproductive".

Contrasting with some dire descriptions made both in Australia and overseas, Mr Turnbull portrayed a terrorist organisation that while dangerous was not an existential threat.

"By most measures … ISIL is in a fundamentally weak position … ISIL has many more smartphones than guns, more Twitter accounts than fighters. It does not command broad-based legitimacy even in those areas under its direct control. It is encircled by hostile forces. It is under military pressure."

After meeting with many world leaders, it was clear there was no international appetite to put combat troops into Iraq or Syria. A political solution remained the key to resolving the Syrian civil war, he added.

"Under the circumstances I have outlined, and mindful that Australia has a range of security priorities across the globe and in our own region, there are currently no plans for a significant change in the level or the nature of Australia's military commitment in Iraq and Syria," he said.

"No such change has been sought by our allies. If one were, we would of course carefully consider it."

He said Australia would co-operate more closely with Syria's neighbour Jordan, which is widely seen as a key nation in the fight against global jihadism.

Focus on south-east Asia

The government would also "redouble our efforts" in co-operating with countries in south-east Asia, where many security specialists fear Australians are more at risk than here at home.

"We see a real risk that terrorist groups in the region might be inspired by attacks such as we have seen in Ankara, Beirut, Bamako and Paris and we are very mindful of the fact that hundreds of thousands of Australians visit south-east Asia every year, for business, study or holidays," Mr Turnbull said.

Mr Turnbull said that Muslim leaders had "great responsibility both in denouncing violent extremism and teaching unity in diversity, mutual respect instead of hatred".

He thanked those who had denounced clearly the Paris attacks.

He also sought to reassure Australians about the 12,000 refugees that the country will accept from the Syrian crisis, insisting they would go through the normal, rigorous security, health and character checks.

Labor leader Bill Shorten backed the cautious approach, saying that the presence of Western troops in large numbers in the Middle East would "only feed the propaganda of Daesh", using the alternative name for Islamic State.

"The conflict in Iraq is for Iraq to win. Australia's role in the region is to build capacity, not dependency. We do not want to perpetuate another cycle as occurred following the invasion of 2003 – a large-scale troop movement, civil unrest and ongoing violence, escalation, withdrawal and eventual return."

Mr Shorten also struck a reassuring tone, saying that Australia had among the best police, security agencies and defence force in the world, who were working with the government and Parliament to stop terrorism.

"There can be no 100 per cent guarantee against terrorism occurring here. We already know this. There can be perhaps even less of a guarantee for the safety of Australians overseas ... [But] Australia should know that the qualities that we love about our country - the rule of law, equality, respect, inclusion – remain our most powerful and enduring defence against those who would seek and undermine our way of life."

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