Australian laws will be overhauled to allow the Defence Force to target more Islamic State (IS) fighters in Iraq and Syria, and to reduce the risk of RAAF aircrews being prosecuted for bombing jihadists.

Prime Minister Malcolm Turnbull foreshadowed the legal changes in his official statement on national security, delivered in Parliament.

Until now, the ADF's two-year operation in the Middle-East has focused on enemy combatants in observable roles, including those who drive armoured vehicles or 4WDs flying fighting flags.

But military commanders believe legal settings have constrained the ADF's ability to also target IS fighters involved in support and logistics.

Mr Turnbull has announced laws will be changed to "allow the ADF on the frontline of this fight to have the powers they need".

"We must target Daesh at its base and with lethal force — no exceptions," Mr Turnbull told Parliament.

If passed, the legal changes would remove a potential "gap" between international war-fighting laws and Australian laws covering armed conflict.

Domestic law in Australia would be changed to remove "ambiguity" that the ADF fears create a "small risk" of its members being prosecuted in Australian courts for "causing the death of a person not causing hostilities".

Once freed of any threat of court action at home, the defence force predicts RAAF crews will unleash more airstrikes on more targets.

"It opens the targeting aperture ... yes, it means more strikes" an official has told the media.

Air strike boost in quest to regain Mosul

Increased air strikes on a broader range of targets will form part of the international coalition's strategy to wrest the city of Mosul back from Islamic State, which Australia estimates has lost half of the territory it once held in Iraq.

The Turnbull Government is likely to win bipartisan support for the legal changes.

After receiving his own briefing on the matter, Opposition Leader Bill Shorten told Parliament "our CDF has made it clear they want to make sure that when we ask our young men and women in our professional ADF to carry out the missions which Australia deems to be important in our national interest ... that we don't set them up to head into a legal minefield".

"I'm confident this can be done in a cooperative and bipartisan way."

The Defence Chief had first flagged the need for legal changes with the Prime Minister in January when the pair had travelled to the Middle East to visit Australian RAAF, Navy and Army personnel.

He is now making the case publicly for the legal upgrade.

"The ambiguity that we've discovered and created by this situation is of concern because on operations now, we're asking people to make split-second decisions in a very dynamic organisation and there is a condition that exists where domestic — a domestic court may take a narrower interpretation of Australia's obligations under international law and potentially prosecute an ADF member."

The conflict Australia and other allies find themselves fighting in the Middle East is not unique but in military law it does not sit easily within older legal structures set up before the spectacular rise of international Islamic extremist terrorism in 2001.

Those structures assumed warfare would generally be fought "state on state" or, if a civil war, governed by domestic laws.

Islamic State threw up a legal conundrum because it is not a state — yet it swept across the border of two states and drew in a coalition of nations to combat it.