Russia's decision came after the US confirmed it shot down a Syrian Su-22 fighter bomber Sunday.
It's the latest twist in a conflict that one analyst has described as undergoing a "dramatic escalation" as an "uneasy battlefield coexistence" between forces with competing aims proves impossible to maintain.
"As a precautionary measure, Australian Defence Force strike operations into Syria have temporarily ceased", The Canberra Times publication quoted the statement as saying.
Defence is monitoring the situation closely.
Australia has about 780 soldiers in Syria and Iraq as part of a US-led coalition designated to eliminate every single trace of the terrorist organization.
A U.S. Navy F-18E Super Hornet took out the Su-22 bomber Sunday, marking the U.S.'s first air-to-air kill since the early 1990s during the Gulf War.
Throughout Syria's six-and-a-half year civil war, the United States has supported rebels opposed to President Bashar Assad's government and extremist groups like IS, while Russian Federation has backed Assad. Russian Federation said it will now treat any aircraft or drones as threats if they operate in any areas west of Euphrates.
"The shooting down of a Syrian Air Force jet in Syria's airspace is a cynical violation of Syria's sovereignty".
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"As of June 19 this year, the Defense Ministry of the Russian Federation has ended its interaction with the USA side under a memorandum for preventing incidents and providing for safe flights during operations in Syria and demands that the USA command carry out a careful investigation and report about its results and the measures taken", the statement reads.
"Any aircraft, including planes and drones of the worldwide coalition, detected in the operation areas west of the Euphrates River by the Russian air forces will be followed by Russian ground-based air defense and air defense aircraft as air targets", the report said.
The downing of the warplane - the first time in the six-year conflict that the US has shot down a Syrian jet - came amid another first: Iran fired several ballistic missiles Sunday night at IS positions in eastern Syria in what it said was a message to archrival Saudi Arabia and the United States.
With myriad competing forces quickly converging in Syria, and new powers delegated to Trump's commanders, the risk of additional confrontation is real.
Dunford called the hotline an important tool to ensure the safety of flight for American and Russian crews, and to allow the U.S.to press its campaign against Islamic State militants.
Meanwhile the Syrian army and its allies are also closing in on Raqqa and last week the Syrian military reached areas controlled by the SDF, making clashes between the opposing alliances nearly inevitable. It's an effort made more complicated by the increasingly messy battlefield in the Arab country, which includes deepening Iranian involvement - its first missile foray into Syria occurred Sunday - and an ongoing probe in the United States into Russian meddling in the presidential election.
The U.S. says it downed the Syrian jet on Sunday after it dropped bombs near U.S. -backed Syrian Democratic Forces conducting operations against the Islamic State group.
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