PM John Howard, a key US ally, is seeking re-election on 9 October

Treasurer Peter Costello cited the example of Madrid, which suffered an al-Qaeda-linked attack that killed 191 people days before the election.

Australia, like Spain, has the choice of re-electing a government which has backed the US-led war in Iraq.

In contrast, the main opposition has pledged to pull troops out of Iraq.

"In Spain, during an election, there was a terrorist incident, so we have to be careful in Australia," Mr Costello told Melbourne radio station 3AW on Monday.

Madrid attack

The bombings in Madrid in March were thought to have sought to influence the outcome of the general election. The socialist opposition went on to win the poll, and pulled the country's troops out of Iraq.

Every election is high stakes but this one will have more than the usual elements of drama and suspense The Sydney Morning Herald Election issues split Australian press

But Mr Costello stressed that terrorists should not try this tactic in Australia.

"Any terrorists should understand this point - if they think some kind of attack on Australians is going to change Australian policy, they're wrong, dead wrong," he said.

The presence of Australian troops in Iraq is expected to dominate the polls, in which 65-year-old Mr Howard is seeking a fourth term.

The veteran leader faces stiff competition from Labor Party leader Mark Latham.

The most recent opinion poll, taken just before Mr Howard called the election at the weekend, gave Labor a lead of 11 percentage points over the government's Liberal/National coalition - 55.5% to 44.5%.