The prime minister will use Thursday's counter-terror summit to push premiers to hand over the pictures of every licensed driver in their state so federal agencies can build a national facial recognition data base.

Access to the millions of licence pictures would allow surveillance cameras armed with facial recognition technology to scan crowds looking for a match with suspected terrorists and criminals.

Government sources have told 9NEWS that the information on drivers’ licences is the “mother-load” it needs to build a powerful law enforcement tool.

Federal agencies have access to passport and visa application photos but that pales in comparison with the licence information held by the states. In time, Facebook photos might also be added to the database.

Debate over the next step in building the National Facial Biometric Matching Capability will be the hot topic at the counter-terror meeting in Canberra, as it gathers in the shadow of the latest mass shooting in the United States.

Law enforcement agencies have been pushing for the capability for some time but it has met resistance over privacy concerns as international experience has highlighted some problems.

Malcolm Turnbull will meet with state premiers on Thursday to discuss counter-terrorism. (AAP)

In the United States, 18 states give the FBI access to drivers’ licence photos. That means that more than half of all Americans have their photos stored in the agency’s facial recognition databases.

The Centre for Privacy and Technology at Georgetown Law has raised serious concerns about the system saying it creates “a virtual line-up of their state residents”.

“In this line-up, it’s not a human that points to the suspect – it’s an algorithm,” the study says.

Mistakes are made. A US House of Representatives hearing has been told that the algorithms that make the matches are wrong 15 percent of the time and are more likely to misidentify African-Americans.

The prime minister and premiers will also use Thursday’s gathering to toughen laws to make it an offence to have "instructional terrorist material" or to be involved in a terror hoax.

The Commonwealth will continue to press for the harmonisation of federal and state laws to ensure there is a nation-wide presumption against bail and parole in terror cases.

But police and intelligence agencies admit that there is little that can be done to try and stop a lone-wolf attacker who is not on the authorities’ radar, like Las Vegas shooter Stephen Paddock.

Australia’s best defence against that kind of mass shooting is its tough gun laws, which make it impossible to legally obtain the military arsenal used in the atrocity.