Grandmother Galit Carbone, 66, was executed at the Be'eri kibbutz, kilometres from the Gaza Strip, after the terrorist group Hamas launched deadly land and air attacks on Israel's southern border on Saturday.
"This is heartbreaking news," Home Affair Minister Clare O'Neil told Seven's Sunrise program on Wednesday.
"I say to the Jewish community, we're standing with you, wrapping our arms around and you and I express my deepest condolences for what has happened."
Foreign Affairs Minister Penny Wong is leading efforts by the government to help the estimated 10,000 Australian residents in Israel on top of tourists.
Asked if rescue flights were being considered, Ms O'Neil said "we are looking at all options at the moment and we'll do whatever is necessary".
With developments in Israel and Gaza, the Australian Government is assessing all options for Australians wanting to leave.— Senator Penny Wong (@SenatorWong) We understand the difficulties with limited commercial options. If you want to leave and do have a viable option, we encourage you to pursue that.October 10, 2023
But Australians in Israel have expressed frustration at the government for not offering a safe pathway home.
Keanu Vincente told ABC TV he felt stranded.
"Especially when I'm seeing constant other repatriation flights coming from other countries," he said.
"So it would feel a lot safer ... to have the Australian government doing those flights for all of the Australians here."
Asher Lilley says the situation is terrifying. She and her sister have a commercial flight booked but are worried about cancellations.
"Every single day more and more flights are getting cancelled and all we can do is just hope that we are actually going to be able to get out," she told Nine's Today program from Tel Aviv.
She said she was told by the Australian embassy "we hope it works out" when she made contact and told them she had a commercial flight booked.
"(It was) as if we just missed a flight whereas we're stuck in a literal war zone," she said.
"The communication has been shocking ... what's the point of having an embassy if they're not doing their job.
"We need to do better - it's so scary being stuck in a war zone, we just want to get out, we just want to get home."
Deputy Liberal Leader Sussan Ley said the government wasn't doing enough to make people feel safe.
"(Ms O'Neil) is not stepping up and reassuring the Jewish community of their safety, of implications with domestic terrorism which, of course, always relate to an international act of war," she told Sky News.
"That should be done in daily press conferences, it should be ongoing, it shouldn't be something that we just happen to catch in an answer to an interview."
More than 1000 people are dead - the overwhelming majority of whom were civilians - after the Islamist group Hamas attacked Israeli towns from the Palestinian territories.
Scores of Israelis and some foreigners were captured and taken to Gaza as hostages. Some were paraded through the streets.
The death toll from Israel's retaliatory air strikes is believed to have killed at least 830 people and wounded 4250 in Gaza.
Hamas - which Australia has designated a terrorist organisation - has threatened to kill the hostages if the bombing continues without warning.
More than 1000 people attended a Free Palestine rally in Melbourne on Tuesday evening.
News Corp has reported mother of two Adi Kaplon, the daughter-in-law of an Australian man, is being held by Hamas. The Australian government has not confirmed if any citizens are being held hostage.
The Israeli government has ordered a complete siege which will cut off food, fuel, water and electricity to Gaza.
The United Nations special rapporteur on the occupied Palestinian territories said a full-scale blockage would only make the situation worse with residents trapped under both Israel's illegal occupation and "Hamas' tyrannical rule".
"Collectively punishing an entire population, is it not going to further inflame or aggravate the sense of frustration?" Francesca Albanese told ABC radio.
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