Australia's neighbourhood faces a "substantially" increased threat from Islamic State with the current battle against militants in the southern Philippines serving as a sharp wake-up call, head of the US Pacific Command Admiral Harry Harris has warned.

Speaking on board the visiting American warship USS Bonhomme Richard, Admiral Harris told Australian journalists that "ISIS is trying to gain a foothold in the Indo-Asia Pacific and I think it behooves all free nations to take a stand and play a part in defeating ISIS."

On board the visiting American warship USS Bonhomme Richard, where the opening ceremony for Talisman Sabre was held. Credit:John Feder

He said the situation in Marawi city, where the Philippines army has been bogged down in a ferocious battle against Islamic militants, was a "wake up call for the region."

Australia's Chief of Joint Operations, Vice Admiral David Johnston, confirmed that the ADF had contributed three aircraft to assist Philippines forces with intelligence and surveillance support.