SYDNEY - Australia considered raising its swine flu alert level Friday after a global pandemic was declared, as the prime minister admitted Asia-Pacific's worst-hit country faced 'challenges' from the virus.

Just hours after the World Health Organisation (WHO) announced the first pandemic in 40 years, health officials went into emergency talks on moving from the 'contain' to the 'sustain' alert phase.

The higher alert level gives the government the power to close sports events, restrict travel and even shut national borders, although officials stress extreme measures are unlikely.

Prime Minister Kevin Rudd said Australia had prepared well for the outbreak but he warned the population's mobility could cause problems. The country currently has 1,307 confirmed cases including four in intensive care.

"I think in terms of preparedness we're OK, but let's look at the fact that Australia is a highly mobile population and a lot of Australians travel internationally and as a result we've got some challenges to deal with," Rudd told the Seven Network.

"The committee which deals with this, involving commonwealth (national) and state officials, will be meeting again this morning to look at the WHO's overnight change in the global status..

"We need to work through this calmly, methodically, step by step."

Swine flu has exploded in Australia this month, making it the fifth most affected country worldwide and helping persuade the World Health Organisation to declare a pandemic.

The number of cases rose rapidly after infected passengers were allowed to leave a cruise ship in Sydney before fanning out into the community. Only the United States, Mexico, Canada and Chile have more cases. -AFP