Reports that an Australian, notorious for holding up the severed heads of Syrian victims, has been killed fighting in Iraq have raised the potential for his young family to be repatriated from the Middle East, Australia's foreign minister said on Tuesday.

Australian intelligence agencies were attempting to verify the recent deaths of Australians Khaled Sharrouf and Mohamed Elomar in the Islamic State-held city of Mosul in Iraq, Foreign Minister Julie Bishop said. Both men were seen in photographs posted on social media holding heads of Syrians.

Fairfax Media newspapers reported last month that the Australian family of Sharrouf's Muslim-convert wife, Tara Nettleton, was trying to help her bring her three young boys and two teenage daughters from Syria home to Sydney.

Sharrouf's 7-year-old son horrified the world a year ago when he was photographed holding the severed head of a Syrian soldier by the hair.

U.S. Secretary of State John Kerry described it as "one of the most disturbing, stomach-turning, grotesque photographs ever displayed."

Bishop said the Sharrouf's death would have to be verified before Australia considers repatriating the family.

"We understand that there are family members in Syria or Iraq and should these reports be verified, then we will try to be in contact with them," Bishop told Australian Broadcasting Corp.

But the government will not guarantee that the family can return.

"It would depend very much on the circumstances and the advice that we receive from our intelligence agencies at the time," Bishop told ABC.

Sydney-born Sharrouf, who was also a Lebanese national, was a prime target of legislation to be introduced to Parliament on Wednesday that would allow terrorists who are dual nationals to be stripped of their Australian citizenship.

The law would automatically strip the citizenship of dual nationals convicted of terrorism offenses or suspected of serious terrorism-related offenses.

Prime Minister Tony Abbott said the government was considering making the law retroactive so that terrorists already convicted could be deported on release from prison. The law could apply in future to Australians who were not dual nationals but could apply for citizenship from a parent's homeland.

The government estimates that up to half of about 120 Australians who have traveled to Iraq and Syria to fight for the Islamic State movement are dual citizens.

The government has also passed contentious new laws that make it a criminal offense to even visit Mosul or the Islamic State movement's Syrian stronghold of al-Raqqa province, where the Sharrouf family was thought to be based.

Sharrouf was among nine Muslim men accused in 2007 of stockpiling bomb-making materials and plotting terrorist attacks in Sydney and Melbourne, Australia's largest cities. He pleaded guilty to terrorism offenses in 2009 and served less than four years in prison.

Sharrouf slipped out of Australia in late 2013 using his brother's passport because his own had been canceled. Nettleton later took their children to Syria to reunite with her husband.

Nettleton's father, Peter Nettleton, said his son-in-law's reported death filled him with joy.

"I was ecstatic when I heard he was dead. It's great news." Peter Nettleton told The Daily Telegraph newspaper.