Mr Natalegawa said he did not see any "quick fix" to the ISIS situation, and were Western countries to apply direct military force it would only "create new problems".

Australia has about 120 fighters who are either citizens or dual nationals fighting with Islamic State.

Earlier in a forum session on ensuring the region's security, former defence minister Robert Hill said Australia's defence white paper would have to update military strategy on tackling Islamic State.

The defence white paper sets out the Abbott government's vision for the military for the next 20 years, including a $275 billion-plus weapons wishlist; it is due for release either late this year or early next year.

"Clearly there has been an implosion in the Middle East; ISIS is different to the types of terrorist organisations we have seen before because it takes and holds territory," Mr Hill said.

But he said despite the tensions of China's territorial disputes with its neighbours in the South China Sea and East China Sea, Australia's immediate region was relatively stable.

"Australia doesn't face a demonstrable conventional threat for the forseeable future; our troops are most likely to be used in Coalition with other forces as has been the pattern for more than a decade," Mr Hill said.

"The paper will reflect China exerting its nationalism which may cause some pain for neighbouring states but I suspect the [2015] defence white paper will be more nuanced in its treatment of China than the Kevin Rudd white paper of a few years back."

But ANU professor of strategic studies Hugh White said the big question for the coming defence white paper was how it handled China's challenges to the primacy of the United States in the Asia Pacific.

Professor White said Australia could simply no longer be sure the US would continue to play the role of security guarantor for the Asia Pacific the way it had over the past 40 years.

He said the risk of an outbreak of conflict between the two big powers was far "less unlikely than it used to be", given ongoing tensions over the South China Sea and the East China Sea. Australia needed to consider whether it needed to be more self-reliant, including having a bigger submarine force than the 12 planned, more smaller warships and land strike missiles to act as a deterrent.