Prime Minister Anthony Albanese has recognised October 7 as "a day of pain and terror for Jewish people around the world" after the 2023 attack by Hamas, which Australia has designated as a terrorist organisation.
"We must never forget the atrocities that were inflicted by Hamas," he said on Tuesday.
"We also think of those still held hostage and join with our partners around the world in calling for the hostages to be returned immediately, and with dignity."
Opposition Leader Sussan Ley said the cross-border attack resonated beyond Israel.
"Two years ago, the world was changed as one of the most horrific terrorist attacks in modern history was perpetrated against the people of Israel," she said.
"This was an attack on Israel, but it was an attack on the world too."
She paid tribute to those killed, including Australian Galit Carbone, whose brother Danny Majzner - a survivor of the October 7 attack - is expected to be at Parliament House in Canberra on Tuesday.
Some 1200 people were killed and 250 taken hostage during the Hamas cross-border attack that began at 6.29am local time. Some of the hostages are dead and others are still in captivity.
The attack triggered an Israeli military campaign that has killed more than 66,000 Palestinians in the Gaza Strip.
Hamas officials and an Israeli delegation are in Egypt for renewed negotiations, sparking hopes for a ceasefire after US President Donald Trump announced a 20-point peace plan last week.
"I am told that the first phase should be completed this week, and I am asking everyone to MOVE FAST," Mr Trump said in a social media post.
Mr Albanese welcomed Mr Trump's efforts, saying Australia wanted to "see a just and lasting peace in the Middle East".
Ms Ley lambasted some protesters who chanted anti-Semitic slogans on the steps of the Sydney Opera House two years ago, within days of the attack in 2023.
Meanwhile, pro-Palestine demonstration organisers are contesting a decision by NSW Police to refuse - for public safety reasons - a planned protest at the globally recognised landmark in the NSW Supreme Court on Tuesday.
At a vigil held on Monday in Sydney's city centre, academic Peter Slezak said his experience as the son of Holocaust survivors informed his solidarity with Palestinians.
"What is called anti-Semitism is really justified moral outrage about what Israel is doing and in the name of Jews," he told a crowd of hundreds.
Australia/Israel & Jewish Affairs Council executive director Colin Rubinstein said the past two years had weighed heavily on the Jewish community in Australia and around the world.
"Even if the hostages are released, the war ends, and the Hamas threat is decisively disarmed, the Jewish experience can never return to what it was like before October 7, 2023," he said.
