Australia won’t be intimidated by the latest beheading by Islamic State militants, says Immigration Minister Scott Morrison.

The extremist group has released a video purportedly showing a masked militant killing British aid worker David Haines, who was taken hostage in Syria in March 2013.

His death is the third such execution in recent weeks, following the beheadings of US journalists James Foley and Steven Sotloff.

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 “We can’t be intimidated by this and we won’t be,” Mr Morrison told Network Ten on Sunday.

Since the decision to raise Australia’s terror alert level from medium to high on Friday, it has been revealed the Defence Security Authority has warned uniformed military personnel they could be targeted by Muslim extremists.

The DSA has highlighted the case of one officer who was verbally abused in Sydney’s CBD.

Mr Morrison said authorities will crack down on such behaviour.

“These characters are just idiots,” he said.

Security has been beefed up at football finals over the weekend and at so-called “soft targets” like shopping centres, but the federal government has stressed the terror alert upgrade does not mean an attack is imminent.

Attorney-General George Brandis said the government was not asking people to avoid large crowds.

“We’re saying that you should go to the footy finals, you should go about your ordinary life in the same way you always have, reassured that the government is aware of the threat… and has taken appropriate steps,” he said.

Labor frontbencher Chris Bowen played down claims Australian involvement in an international coalition trying to curb IS fighters in Iraq would increase the domestic security threat.

“Terrorists will engage in terrorist activities for whatever reason they feel is driving them to do it, we can’t let that influence what decisions we take as a nation,” he told Sky News.

Australia has so far only provided humanitarian airdrops and weapons airlifts to Kurdish fighters in northern Iraq.

It has not yet been asked to provide other military resources.

Security and intelligence agencies are concerned about the increasing number of Australians who are fighting with terrorist groups such as Islamic State, Jabhat al-Nusra and al-Qaeda in Syria and Iraq.

Senator Brandis said agencies knew the identity of some but not all of the 60-odd Australians fighting in the Middle East.

However, the government would ensure none returned to Australia undetected.

“Any foreign fighter who returns and has committed a crime by participating in the civil war in Syria and northern Iraq will be prosecuted,” he said.

The government is urging families of young Australians fighting in the Middle East to try and convince them to come home.

“If we could stop youngsters, teenagers from falling into the snares of ISIL or Jabhat al-Nusra or other terrorist organisations … we hope to be able to rescue them before they commit these crimes,” he said.

Labor leader Bill Shorten described the murder of David Haines as “shocking and sickening”.

“My heart goes out to the family of the aid worker who’s on this video,” he told reporters in Cessnock.

“It’s just a deplorable act of evil. I absolutely condemn it.”