Israel will only be "secure and free" when Palestine is, senior federal minister Chris Bowen says, as the Jewish nation and Hamas swap prisoners for hostages.
Hamas released 13 Israelis and four Thai hostages on Saturday local time, in a second round under a ceasefire deal.
In exchange, Israel released dozens of Palestinian detainees and prisoners.
Mr Bowen said the government welcomed the release of hostages and reaffirmed the government's view that Israel had rights and obligations to follow under international law.
"Israel can only really be secure and free when Palestine is secure and free, and ultimately, that is our long term objective," he told ABC TV's Insiders on Sunday.
He defended Foreign Affairs Minister Penny Wong for remarks she made calling for "steps towards" a ceasefire in Gaza.
"We all want to see these arrangements become more permanent, because that is the pathway to peace," he said.
It came as Sydney's Jewish community rallied against anti-Semitism in Martin Place on Sunday morning, demanding the remainder of the hostages in Gaza be released.
Independent MP Allegra Spender, whose Sydney electorate has one of the highest Jewish populations in the nation, spoke at the rally, along with Liberal Senator Andrew Bragg and former NSW treasurer Eric Roozendaal.
"I have been appalled at the anti-Semitism I had seen before October 7 but absolutely since then," Ms Spender said.
"I know that the Jewish community is not the only community that is targeted.
"I had a young Palestinian woman come to me and say ... she was told to basically go back to Lakemba. That is not Australian values either."
Executive Council of Australian Jewry co-chief executive Alex Ryvchin said his community was relieved and grateful "that some of the most vulnerable hostages including babies and the elderly are now free, away from the hell of Hamas captivity".
"But it is difficult to feel joy knowing that some of the hostages are orphaned or the last surviving members of their families," he said in a statement.
Rally organiser Avi Afrat told AAP there could be no real ceasefire until all the hostages were freed.
" Of course, it makes some kind of help, but people are still sad.There are still women and kids that are being held."
Outside Victoria's State Library on Sunday, former Greens turned independent Senator Lidia Thorpe spoke at a Free Palestine rally, saying Australia's Indigenous community knew what Palestinians were enduring.
"We are sorry that you have lost so many babies and so many family members," she said.
"We understand that pain and we stand with you every minute of every day."
She apologised for not speaking out earlier, citing living at home under police protection for months.
Draped in a scarf emblazoned with a Palestinian flag, Ms Thorpe said she would return to Canberra on Sunday and vowed to wear the attire into the Senate chamber and make a statement on Monday and every day the war continues.
More pro-Palestinian rallies to call for a permanent ceasefire in Gaza were held in Sydney, Brisbane and Perth on Sunday.
Qatar is wanting the truce between Israel and Hamas to be extended beyond the agreed four days.
More than 14,000 Palestinians have been killed since Israel began its bombardment of Gaza in response to the October 7 attack by Hamas militants who killed more than 1400 Israelis and took more than 200 hostages.
Opposition legal affairs spokeswoman Michaelia Cash has criticised Prime Minister Anthony Albanese's response to the conflict as "weak".
"The prime minister should have come out immediately, in a strong way, and stood alongside Peter Dutton, and absolutely condemned Hamas and stood with Israel," she told Sky News.
"He was weak in that regard."
