Death and destruction in the southern Gazan city of Rafah cannot continue, Foreign Minister Penny Wong says, following calls for the government to take a stronger stance.
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Senator Wong reiterated the federal government's call for a humanitarian ceasefire to allow aid to flow into Gaza after an Israeli airstrike ignited a massive blaze at a tent camp in the Tel Al-Sultan neighbourhood.
At least 45 people were killed, more than half of whom were women, children and elderly people.
Video of the attack showed a fire raging in the darkness and people screaming in panic.
"The death and destruction in Rafah is horrific, this human suffering is unacceptable," Senator Wong said at a parliamentary hearing on Tuesday.
"We reiterate to the government of Israel, this cannot continue. We must see an immediate humanitarian ceasefire so that civilians can be protected."
Australia supported the work of the United States, Qatar and Egypt in trying to achieve this, the foreign minister said.
She also reiterated calls for designated terrorist group Hamas to stop using Palestinian civilians as "human shields".
"We continue to call for the release of all hostages by Hamas and Israel must allow aid to flow at scale, as directed by the (International Court of Justice)," she said.
The federal government had "consistently opposed the ground offensive" in southern Gaza, Prime Minister Anthony Albanese told parliament.
"We expressed our concern that the impact (of it) would have, given that more than half of Gaza's 2.3 million people were sheltering in Rafah and were told to go to Rafah, where they would be safe.
"Every innocent life matters, whether it is Israeli or Palestinian."
Australian officials have spoken with Israel officials, including the ambassador.
But the government has been urged to go beyond words and take action.
Though Doctors Without Borders executive Jennifer Tierney said she was "happy to hear the language", she urged the Australian government to do more.
"I would encourage us to also look at action as well," she told the National Press Club.
"We want to see them take the most thorough response possible within the UN community.
"The civilian casualties that we are seeing are so outside the bounds of acceptability - of any law of war - that there is no way to contextualise it, to excuse it away."
Australia Palestine Advocacy Network president Nasser Mashni has urged the government to make their position clear.
"It's past time to come out and unequivocally condemn this slaughter," he said on X, formerly Twitter.
But Liberal MP Julian Leeser maintained Israel had been engaging in self-defence.
"Nobody wants to see this drag on any longer, but the ball is in Hamas's court," he told AAP.
On October 7, Hamas attacked Israel, killing 1200 people and taking more than 200 hostages, according to Tel Aviv.
In response, Israel launched air strikes and a ground invasion of Gaza that, according to the local health ministry, has killed more than 36,000 Palestinians, injured more than 80,000 and displaced more than 1.7 million.
Israel's military has claimed the strike in the Rafah neighbourhood was based on "precise intelligence" and had killed Hamas' chief of staff for the West Bank and another official behind attacks on Israelis.
The International Court of Justice on Friday ordered Israel to stop its attacks but Tel Aviv has pressed on.
French President Emmanuel Macron said he was "outraged" by Israel's continued strikes in Rafah, while Germany's foreign office urged for better protection of Gaza's civilians.
"The images of charred bodies, including children, from the air strike in Rafah are unbearable," the office said on social media.
with Reuters
Australian Associated Press
