Indonesia and Australia on Thursday signed an agreement aimed at drawing a line under a damaging espionage row and paving the way for the resumption of full cooperation on issues such as defense.

Ties between the neighbors sank to their lowest point in years in November after reports that Australian spies tried to tap the phones of President Susilo Bambang Yudhoyono and his inner circle.

Australia said Thursday the hunt for missing Malaysia Airlines Flight MH370 will focus on the southern part of the existing search zone after new information suggested it "may have turned south" earlier than thought.

Fifteen Australians, including two young suicide bombers, are believed to have died fighting in Syria and Iraq, intelligence chief David Irvine said Wednesday, warning that espionage and foreign intervention threats were increasing.

Canberra has expressed alarm that around 60 Australians have joined violent jihadist groups such as Islamic State (IS) overseas.

The Australian government on Tuesday announced a Aus$64 million (US$60 million) package to help prevent youngsters from being radicalized and joining extremist groups in the Middle East.

The funding follows a warning from spy chief David Irvine this month that the bloody conflicts in Iraq and Syria are creating a new generation of militants.

Australian Prime Minister Tony Abbott Tuesday said the first remains of Australians killed in the MH17 crash will return home this week, as he announced a memorial for victims in Canberra.

Australia and Singapore vowed Friday to enhance intelligence sharing in the face of growing fears about the threat posed by jihadist citizens returning home after fighting in Syria and Iraq.

Australia's immigration minister Friday strongly defended his government's policy of detaining asylum-seeker children in camps, saying it was "effective" in deterring others from boarding boats destined for its shores.

Australian Prime Minister Tony Abbott on Thursday used the killing of American journalist James Foley to bolster his government's case for contentious counter terrorism reforms that have been rejected by some Islamic leaders.

Abbott described the video recorded beheading of Foley by a masked Islamic State extremist with an apparent English accent as "despicable."

A new underwater hunt for missing Malaysia Airlines Flight MH370 had a "reasonable chance" of finding the plane, Australian Prime Minister Tony Abbott said Wednesday, adding that searchers would not give up easily.

Flight MH370 vanished inexplicably en route from Kuala Lumpur to Beijing on March 8, and there has been no sign since of the aircraft or the 239 people onboard.

Australia and Indonesia have agreed to put a damaging spy row behind them, officials said Tuesday, paving the way for the resumption of full cooperation on issues such as defence.