Jeff R Weyers of Canada-based open source intelligence research group iBRABO said members of Jabhat al Nusra - an Al Qaeda affiliate - have been discussing confirmation of Mahmoud's death.
"The last message that came back on the matter stated, 'the bros which were with him told us this great and saddening news may Allah except him'," said Mr Weyers.
"I'm sure the Twitter feeds will be updated more if they are able to get his body."
Last September, Mahmoud, a friend of senior Islamic State leader Mohammad Ali Baryalei, praised slain terror suspect Numan Haider as the "first Shaheed" or martyr on Australia soil.
However, he had claimed that he hadn't joined any militant group.
Meanwhile, the Kiwi jihadist who claims to be fighting in Syria with the Islamic State has gone to ground.
Mohammad Daniel, also known as Abu Abdul Rahman, and formerly known as Mark John Taylor, deleted his Twitter feed after mistakenly broadcasting his exact location by forgetting to turn off a tracking function on his phone.
He had been revealing his location to intelligence agencies and enemies keeping tabs on him.