Canberra said Thursday there was a "high probability" a notorious Islamic State fighter from Australia and two of his children had been killed in a US airstrike in Syria.

Reports said Khaled Sharrouf and his sons Abdullah, 12, and Zarqawi, 11, were killed last Friday while driving near the IS bastion of Raqa.

Sharrouf sparked international revulsion in 2014 when he posted pictures on social media of Abdullah holding the rotting severed head of a soldier.

The father of five had used his other children in propaganda videos, including one that surfaced this year in which he grilled his youngest son about killing non-Muslims as the six-year-old handled guns and knives.

"Nobody will mourn his passing... I can assure you of that," Australia's Immigration Minister Peter Dutton told Channel Nine.

The Australian newspaper and the Australian Broadcasting Corporation, both citing unnamed government sources, reported the death of Sharrouf and his sons.

But he was mistakenly reported killed in a drone strike in 2015 and Dutton said Canberra was still awaiting official confirmation that the latest accounts were accurate.

"There's a high level of confidence, but this guy's been like a cat with nine lives," he said. 

"There have been reports of his demise and his death before which have been proven, obviously, to be wrong."

Sharrouf, believed to have been born in Australia to Lebanese migrant parents, left for Syria in 2013 with his wife Tara Nettleton and five children.

- Child deaths 'regrettable' -

Earlier this year, he became the first Australian to be stripped of his citizenship under anti-terrorism laws.

Nettleton reportedly died last year after falling ill, while the fate of the other children is unknown.

Dutton said if the latest reports were correct it was "regrettable" that two of Sharrouf's children died alongside him.

But he said the jihadist and his wife put their offspring in harm's way by taking them to Syria, adding: "It's hard to imagine what other outcome they could have imagined for their children."

"The fact is that the Sharroufs took their children into a war zone," he said. 

"They've poisoned their minds, they've indoctrinated young children and if they've been killed along with their father that is regrettable. 

"But that is a decision that was made by the parents by taking them into that war zone. It speaks to the character, or lack thereof, of Mr Sharrouf and his wife."

Dutton was non-committal when asked if the other siblings, two girls and a boy, would be allowed back into Australia.

"Obviously it is difficult to get the intelligence out of a war zone like Syria and we'll wait to see what evidence there is in relation to where they are or their status," he said.

"At the moment we don't have that information."

The children's maternal grandmother, Karen Nettleton, has previously campaigned for their return, denying they had been indoctrinated by the violence their parents exposed them to.

"They're not lost, they're not gone, they're just kids," she told the ABC in May.

"With the right help they should be OK. They will be OK."

Source: AFP