Australia will not send a warship to the Middle East despite a US request, but will deploy additional personnel to help its closest ally.
The government considered a call from the US to deploy a Royal Australian Navy ship to help secure international shipping lanes in the Red Sea, as Iran-backed Houthi rebels continue blockading the area in a show of support for Palestine.
Defence Minister Richard Marles confirmed on Thursday the government would not deploy a warship and would instead send navy personnel.
Up to six extra Australian Defence Force officers will be deployed to the Combined Maritime Forces (CMF) in Bahrain early in 2024, with five personnel already embedded in the CMF headquarters for Operation Manitou, which supports international maritime security efforts in the Middle East and East Africa.
This will bring Australia's total CMF contribution to 16 personnel.
Mr Marles defended the government's move as a "significant contribution" and comparable with other like-minded countries.
"We need to be really clear around our strategic focus and our strategic focus is our region in the northeast Indian Ocean, the South China Sea, the East China Sea, the Pacific," he told Sky News.
Asked if the government's response would have differed had the request been made by an American president, Mr Marles said the contribution was "greatly appreciated" by the US.
"We have a very deep dialogue with the United States, they're very clear about the size of our defence force, the contributions we make in our region and around the world," he said.
Chinese state newspaper The Global Times wrote the government's decision meant Australia had finally stepped out of the US shadow.
Opposition defence spokesman Andrew Hastie criticised the government's decision as bad and weak.
"Richard Marles has his head under the doona because we are a trading nation," he told Sky News.
"We absolutely have an interest in keeping the sea lanes in the Red Sea open."
The decision may have cost-of-living implications for Australians, he said.
More than 12 per cent of global trade flows through the Suez Canal, which is linked to the Red Sea.
A blockade can add extra staffing costs and longer routes for ships.
Mr Hastie said he was worried whether the navy had the capability to defend itself against emerging technologies.
"The question is for the government to answer, can our navy actually defend themselves against such a threat," he said.
Prime Minister Anthony Albanese on Wednesday said the best way for Australia to contribute to stability in the Red Sea was through diplomacy.
Since the October 7 attack by Hamas - considered a terrorist group by the government - Israel has unleashed a bombing campaign on the besieged Gaza Strip.
More than 1200 Israelis were killed by Hamas and 240 civilian hostages taken by the militant group, according to Israel.
Almost 20,000 Palestinians have been killed, according to the Gazan Health Ministry.
There are reports of people being buried under rubble or on the brink of starvation due to the siege.