A proud father's boast accompanies an image the U.S. Secretary of State on Tuesday called "one of the most disturbing, stomach-turning, grotesque photographs ever."

"That's my boy," wrote Khaled Sharrouf on Twitter, alongside a photo of his seven-year-old son using both hands to hold up a man's severed head.

The photo, since removed from Twitter, was reportedly taken in Raqqa, a Syrian city in the stranglehold of Islamic militants, where the Australian father has taken his young family to join the fight.

Condemnation has been swift and on Tuesday included scathing criticism from Australia's most senior Islamic cleric, Grand Mufti Ibrahim Abu Mohamed.

"It is utterly deplorable for extremists to use Islam as a cover for their crimes and atrocities," Mohamed said in a statement to CNN from the Australian National Imams Council.

"Their misguided actions do not represent the overwhelming majority of Muslims who emulate the pure teachings of Islam such as justice, mercy and freedom."

U.S. Secretary of State John Kerry said the image underscored "the degree which ISIL is so far beyond the pale with respect to any standard that we judge even terrorist group."

"That child should be in school, that child should be out learning about the future, that child should be playing with other kids, not holding a severed head and out in the field of combat," he said.

Kerry was speaking at a joint news conference with Australian Foreign Minister Julie Bishop, who also presented the image as evidence of the increasing threat of "homegrown terrorists."

"There are a significant number of Australian citizens who are taking part in activities in Iraq and parts of Syria: Extremist activities, terrorist activities," Bishop said.

"Our fear is that they will return home to Australia as hardened homegrown terrorists and seek to continue their work here in Australia."

Born in Australia in February 1981, Sharrouf is the son of Lebanese parents, who had a violent relationship with his father and spent most of his youth in and out of local courts.

Details of Sharrouf's troubled teenage years were revealed in court documents from his sentencing in the New South Wales Supreme Court in 2009 on terror-related charges.

According to the documents, Sharrouf was expelled from school in Year 9 for violent conduct, and "was soon drawn into bad company."

He appeared before the courts on a number of minor charges between 1995 and 1998, when he was also regularly taking amphetamines, LSD and ecstasy. The drugs were likely to have been a "significant factor" in the emergence of schizophrenia, the documents said.

Sydney attack plot

Sharrouf worked as a labo

rer in the building industry for a time but survived mostly on a disability support pension until his arrest in November 2005 on terror-related charges.

He was one of nine alleged terrorists detained after a series of raids on homes and businesses as part of Operation Pandanus, an investigation into plans to bring holy war to Australia.

Sharrouf subsequently pleaded guilty to possessing batteries and clocks knowing that they were going to be used to make explosives for a terrorist act. However, Sharrouf's hearing was delayed after he was found to be unfit to stand trial due to mental illness.

In November 2007, a court-appointed specialist said he was suffering an "acute exacerbation of the illness schizophrenia." He was put on medication, and in early 2009, it was deemed he had made a "remarkable recovery."

Sharrouf was sentenced to five years and three months in prison. However, as he'd already served most of that time while awaiting trial, he was released from prison after just three weeks.

'A chance for a fresh start'

During the sentencing, the court heard an affidavit from his wife, Tara Nettleton, who said that she and Khaled had talked about what they wanted to do once he was released from prison. At the time the couple had four children.

"He often tells me how sad he feels that he has missed out on so much of his children's life and that he can't wait to be able to return home so that he can have a chance to make up to his children all the time that was missed and get to know them again," the statement said.

"We often talk about moving out to the country and living on a farm so that we get away from everything and get the chance to have a fresh start," Nettleton added.

It's not clear what Nettleton thinks of her husband's decision to take their children to Syria. However, her estranged father, Peter Nettleton, said he was devastated by the image of his grandson holding a head.

"I'm scared for the children," he told News Corp. "What life are they going to have now?"

Was Sharrouf further radicalized in prison?

Less than five years after his release from prison, it's clear that Sharrouf has not abandoned the ideology that saw him jailed.

If anything, his time in prison has further radicalized him, according to Clarke Jones, an expert from the Australian National University, who is writing a book on the radicalization of inmates.

"The way we incarcerate terrorists -- the labels we put on terrorists -- we tend to isolate them and segregate them. But sometimes it's better to incorporate these types of individuals with other inmates.

"If you isolate them and segregate them, it tends to give them time to think and strengthen their cause, strengthens their ideologies. So I think this time in prison made him worse," he said.

"If he has severe psychological conditions he needs treatment -- he's a sick individual."

It's unclear why Khaled has chosen to take his young family to a war zone, but Jones says if he was doing it to win support, he's likely to have failed.

"For some reason he thinks that getting his son to hold up a head is going to attract people to his cause. I actually think it's going to have a negative effect. I think it's going to deter some of those who might have wanted to demonstrate their faith to a religion," he said.