Islamic leaders fear Australia's heightened terror threat rating will victimise Muslims and deepen "Islamaphobia".

The Australian Federation of Islamic Councils says the country's Muslim population – about 500,000 nationally – will be unfairly targeted and face increased prejudice due to the high terror alert announced on Friday.

Federation spokesman Keysar Trad said raising Australia's threat level to the point that a terrorist attack on Australian soil is considered likely will be a "dog whistle to hate writers in the media who will write more negative rhetoric directed at the Muslim community".

"This only increases pressure on the Muslim community and makes it even more difficult to feel like an Australian," he said.

Mr Trad said Muslims already faced unfair targeting by law enforcement and security authorities, but "what happens is that increases in times like this".