Indonesia has become an 'object of ambition' for the Islamic State, which seeks to build a 'distant caliphate' in the country with the largest Muslim population, Australia's attorney-general has warned. 

Isis declared a caliphate in Iraq and Syria last year after it seized swathes of territory in the two countries. The group also has a significant presence in other countries such as Libya, Afghanistan and even Pakistan. 

The warning by Australian attorney-general George Brandis comes after Indonesia arrested nine Isis-linked terrorists in multiple raids over the weekend after a tip-off from the Australian Police and the FBI. 

"You've heard the expression the 'distant caliphate'? ISIS has a declared intention to establish ­caliphates beyond the Middle East, provincial caliphates in ­effect. It has identified Indonesia as a location of its ambitions," Brandis told The Australian. 

On Monday, Australia and Indonesia signed an agreement to boost intelligence-sharing to combat terrorism. The two countries also agreed on measure to cooperate in addressing cyber-crime and terror financing. 

Australia's justice minister also raised concerns of security in Indonesia and Australia given the rise of Isis. 

"The rise of Isis in the Middle East is something that has de­stabilised the security of Australia, it's destabilised the security of ­Indonesia and it's destabilising the security of our friends and ­partners, particularly here in the ­region," Justice Minister ­Michael Keenan said in Jakarta at a meeting with Indonesia officials, the Australian newspaper reported. 

Nine terrorists, many belonging to a group linked to Daesh, the Arabic acronym for Islamic State, were arrested at five different raids in central Java on Friday and Saturday, and they had planned to carry out bombings on New Year's eve in Jakarta. 

The raids uncovered bomb-making explosives as well as Isis-styled jihadi flags. 

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