Exhausted firefighters are battling to contain a "mega blaze" covering half-a-million hectares on the New South Wales-Victorian border.
Major fire fronts burning at East Ournie Creek and Dunns Road merged on Friday, creating a bushfire of enormous scale.
The NSW Rural Fire Service confirmed the massive blaze was burning in just one of several "red zones", where people are in the most danger.
After three days of back-burning, clearing roads and evacuation of residents, the two initially seperate fires were upgraded to watch and act level at 11am on Friday amid high temperatures and ferocious winds.
Prime Minister Scott Morrison told reporters on Friday afternoon he had issued instructions to the Chief of Defence to prepare the troops.
"I've given them very clear instructions that they are to stand ready to move and support immediately in the event that they are needed," he said.
"They will move and ensure they can provide support as swiftly as they can, but again, working in concert with local state and territory authorities."
People in the state's most at-risk regions have been urged to evacuate as extreme fire weather exacerbates the risk of more ongoing bushfires spreading and even merging.
It's likely to be "long, difficult and potentially dangerous", RFS Commissioner Shane Fitzsimmons warned on Friday, as an estimated 2500 firefighters battle 134 fires including 53 which are uncontained across the state.
For further information on bushfires across eastern Australia or if you are concerned about family and friends, more information can be found at the following emergency services links:
Live updates Victoria
Live updates NSW
Live updates South Australia
Missing persons Red Cross
After a brutal night for emergency services trying to control two out-of-control fires in Kangaroo Island, warning levels for all all fires were reduced to a watch and act after rain brought some much-needed relief on Friday.
Assessments are now underway, but some homes are believed lost at Vivonne Bay while the town of Parndana was spared, despite fire bearing down on it from several directions.
Two Country Fire Service trucks were involved in burn-overs and two more CFS personnel were injured, taking the total hurt on Kangaroo Island to 22.
Emergency services in Perth remained on high alert on Friday as fire crews battled a large bushfire that burned through paddocks and rural properties in the city's south.
There were fears the fire would breach containment lines and approach the city's major freeway due to strong winds.
So far, more than 1200 hectares have been burnt as about 180 firefighters work to contain the fire.
A watch and act remains in place for Mundijong, Hopeland, Oldbury, Mardella, Serpentine, Baldivis, Wellard and Cardup.
Federal government strategies for rebuilding
Meanwhile, the states have each been given millions of dollars in commonwealth cash to immediately provide to local council areas worst affected by the fires.
The federal government is working with the small business lobby to help shop owners and tourist operators devastated by the fires as the government announced earlier this week it had committed $2 billion towards the recovery effort.
It has also developed a mental health strategy expected to be announced in coming days.
In the longer term, the prime minister says any national inquiry into the bushfires needs to be wide-ranging and examine what impact climate change has had on the crisis.
Mr Morrison is weighing up calling a royal commission into the disaster, which would also look at hazard reduction burns and national coordination.
"I think Australians, because of the scale of this particular disaster, will be looking for something more holistic," he told 2GB radio.
"That's not the focus right now – today there are severe and extreme fire forecasts in Victoria and NSW – but down the track, that's what premiers and I will discuss."
The bushfires have so far killed 27 people and destroyed more than 2000 homes.