He said Islamic State would fight until the black flag was flying over Buckingham Palace and the White House.
"Bring every nation that you want to come and fight us. It means nothing to us. Whether it's 50 nations or 50,000 nations, it means nothing to us. Bring your planes. Bring everything you want to us. Because it will not harm us. Why? Because we have Allah."
Elmir disappeared in June along with another 16-year-old Australian boy.
It is believed the pair travelled to Turkey and then crossed the border into Syria to join the Islamic State militants.
The 16-year-old was later intercepted by his father and has since returned to Australia.
In a statement, Mr Abbott said the video "again highlights the threat posed by ISIL [Islamic State]".
"ISIL is a threat that reaches out to Australia and our allies and partners.
"That is why Australia has joined the Coalition to disrupt and degrade ISIL in Iraq and is giving our law enforcement and security agencies the powers and resources they need to keep Australia and Australians as safe as possible."
Shadow attorney-general Mark Dreyfus said: "It is tragic that a misguided young Australian has become caught overseas up in this terrorist cause," he said.
"We have been working with the Government to do all we can to prevent Australians from travelling overseas to join the foreign conflict in Syria and become further radicalised."
PHOTO: Abdullah Elmir, 17, is believed to have left Australia in June (ABC News)
