Foreign Minister Penny Wong has urged Israel to stop attacking medical facilities as Gaza's largest hospital comes under siege.
Palestinian officials say two babies are dead and dozens more patients are at risk following Israeli strikes at the Al-Shifa hospital complex.
Israel has said gunmen for Hamas, which has been labelled a terrorist organisation by the federal government, have placed command centres under and around the hospital.
"We understand the argument that Hamas is burrowed into civilian infrastructure but the international community looking at what is occurring in hospitals would say to Israel these are facilities protected under international law," Senator Wong told the ABC's Insiders program on Sunday.
"Israel should do everything it can to observe international law ... we are particularly concerned with what is happening with medical facilities."
Senator Wong reiterated calls for a ceasefire in the conflict, saying a humanitarian pause should be a first step.
"We all want to take the next steps towards a ceasefire but it cannot be one-sided," she said.
"Hamas still holds hostages, Hamas is still attacking Israel.
"(Hamas) has no respect for international law but Australia is a democracy and so too is Israel, and the standards that we seek and accept are much higher."
The foreign minister also labelled protests over the Middle East conflict, where pro-Israel and pro-Palestine groups faced off on Friday in the Melbourne suburb of Caulfield South, as distressing.
The clash sparked the evacuation of a nearby synagogue, which protest organisers have apologised for.
"All Australians, including our Jewish community, have a right to be safe and to feel safe," she said.
"We understand the distress but let us not let that distress turn to anger and hate in a way that divides us."
Further protests were carried out in Melbourne on Sunday, along with similar rallies in Sydney and Brisbane.
Deputy Prime Minister Richard Marles said Australians deserved the right to be safe and denounced anti-Semitism.
"This demonstration on behalf of Palestine in the heart of the Jewish community was unacceptable," he told Sky News on Sunday.
"Right now, Jewish Australians have never felt less safe and this is a real problem, and we need to be moving to fix that."
Mr Marles also denounced Islamophobic comments aimed at Australia's Muslim community following the latest outbreak of violence in the Middle East.
"There are Muslim Australians I've spoken to ... who feel a sense of isolation in this moment," he said.
"That's unacceptable as well."
Opposition defence spokesman Andrew Hastie also condemned Friday's protest in Melbourne.
"What we saw on Friday in Caulfield was anti-Semitic, thuggish behaviour," he told Sky News.
"It was a power grab and it was an assertion of one group over another for primacy in the public space."
Mr Hastie said Israel had shown "great restraint" in its response to the conflict following the October 7 attacks by Hamas.
"(Israel) have had people from across the globe calling on them for restraint and they've sent millions of warnings to people living in Gaza to evacuate, reminding them that there might be an attack imminent," he said.
