The grandfather of a seven-year-old boy pictured clutching the severed head of a Syrian soldier has urged the Australian government to bring the child home.
Truck driver Peter Nettleton, from Sydney, said he was "gutted" to see a front page photo in The Australian newspaper of his grandson lifting the head by the hair with both hands.
The newspaper said the image was taken in the northern Syrian city of Raqqa and posted on Twitter by the boy's convicted terrorist father, Khaled Sharrouf.
Mr Nettleton, father of Sharrouf's Anglo-Australian wife Tara Nettleton, said he thought his five grandchildren had been living in Malaysia while Sharrouf fought with the Islamic State army in Syria and Iraq.
"I'm scared for the children," Mr Nettleton told the Daily Telegraph . "What life are they going to have now? Can't the government do something to pull these kids away from that man?"
Sharrouf, 33, also posted a photograph of his three sons posing with him in matching camouflage fatigues and armed with assault rifles and a pistol with an Islamic State flag as their backdrop. He also has two daughters, The Telegraph said.
Mr Nettleton said he became estranged from his daughter nine years ago after she converted to Islam and married her teenage sweetheart, an Australian born to Lebanese immigrants.
Australia's foreign minister Julie Bishop told Australian Broadcasting Corporation the family could face legal action if they returned to Australia. She did not say whether her government would make an effort to secure the children's return.
"This imagery, it's shocking and it underlines what we've been saying about this threat to Australia and Australians from violent extremism," she said.
She later said jihadists whose "barbaric ideology" threatened Australia's way of life would be a focus of annual bilateral security talks with US secretary of state John Kerry and US defence secretary Chuck Hagel.
Sharrouf used his brother's passport to leave Australia last year. The Australian government had banned him from leaving the country because of the terror threat he posed.
Ms Bishop was asked, but failed to explain, how his wife and children came to be allowed to leave the country.
Sharrouf was among nine Muslim men accused in 2007 of stockpiling bomb-making materials and plotting terrorist attacks in Australia's largest cities, Sydney and Melbourne.
He pleaded guilty to terrorism offences and was sentenced in 2009 to four years in prison.
Australian police announced last month that they had arrest warrants for Sharrouf and his companion Mohamed Elomar, another former Sydney resident, for "terrorism-related activity".
They will be arrested if they return to Australia.
The warrants followed photographs being posted on Sharrouf's Twitter account showing Elomar smiling and holding the severed heads of two Syrian soldiers.
In June The Australian published a photograph of Sharrouf posing among the bodies of massacred Iraqis.