Katibah Nusantara threatens Malaysia
Malaysia's Prime Minister Najib Razak addresses the nation in a National Day message in the capital city of Kuala Lumpur. Reuters

Malaysian Prime Minister Najib Razak affirmed there is no going back on the fight against terror after a Malay speaking wing of the Islamic State (Isis) vowed to avenge the arrest of its members.

Malaysia's counter-terrorism division confirmed on Monday the Isis affiliate, 'Katibah Nusantara', had posted a video in Bahasa Malaysia that warned of revenge attacks for the crackdown on a terror cell last week.

"I make no apology, I repeat, I make no apology for every step to preserve that safety, and for making the security of all Malaysians my first priority," Najib said at a press conference in Kuala Lumpur.

"We will not wait for an outrage to take place before putting all measures necessary in place. That is our principle," the prime minister added, invoking the January 14 terror attack in Jakarta that put Southeast Asia in a terror alert spotlight.

Ayob Khan, senior official at the Counter Terrorism Division, had said two men in the video were identified as Malaysians Abdul Halid Dari and Mohd Nizam Arifin.

"They threatened to carry out attacks in Malaysia (if their members weren't released)," he told the media at the conference. "They always like to label those against them as a Shiah you see. This is the method they always use," he said.

Earlier last week, Malaysian authorities had said they busted a suspected Islamic State cell and arrested seven people in a three-day operation.

The video titled "Mesej Awam Kepada Malaysia" (Public Message for Malaysia), the extremists said they would submit only to the 'laws of Allah,' Star Online reported.

"We will never bow down to the democratic system of governance as we will only follow Allah's rules," the Katibah said.

Abdul Halid Dari was seen in the video urging Malaysians to declare allegiance to self-styled Islamic State Caliph Abu Bakr Al-Baghdadi and join the fight in Syria.

Formidable enemy 

But Najib stressed there is nothing Islamic about terrorism. "Hundreds have died, and many have been terribly injured. And for what? Not for Islam as there can be nothing Islamic about terrorism. These groups blaspheme against a religion of peace, tolerance and understanding, he said.

"They appal the vast majority of Muslims who say loud and clear: 'you do not act in our name."

Officials see Katibah as an increasingly formidable threat and believe it has more than 200 specialised Malaysian and Indonesian fighters.

"It is certainly alarming if true. Why would the militants speak Bahasa Malaysia if they were not calling out to their fellow countrymen?" asked senior counter terrorism official Datuk Ayob Khan.