Witnesses told police they saw a group of "Middle Eastern men" laughing and running down the street shortly after the synagogue in the western Sydney suburb of in Parramatta was stoned late Sunday.
Blocks of concrete were also thrown at two cars parked on the property, smashing windows.
New South Wales state Premier Morris Iemma said the window of a Sydney mosque had also been smashed on Saturday night and police would not tolerate such violence.
"We will deal severely with anyone who attempts to take matters into their own hands by attacking places of worship," he said.
"The tragic events that are taking place in the Middle East are not a reason for people to take the law into their own hands in this city."
Acting Inspector Col Green told reporters that police were on the alert for further attacks.
"With the heightened political and racial tensions, police are aware that these things may occur," he said.
The local rabbi said he feared the Israeli offensive in Lebanon, which has killed hundreds of civilians, may have prompted the attack.
"It's a great shame to bring that conflict to here," said Rabbi Wernick, who refused to give his first name.
"It is always in the back of your mind, but on the one hand you don't really think that something that is happening in Lebanon will affect a synagogue in Parramatta," he said.
He said he was considering stepping up security at his home next door to the synagogue.
"In a political climate, every organisation is taking precautions," he said.
The attack came a day after Middle Eastern protesters carrying Lebanese and Palestinian flags surrounded Prime Minister John Howard's car during an official engagement in the western city of Perth.
Protesters, who scuffled with police during the demonstration Saturday, said the government was not doing enough to broker peace in the region.
More than 160,000 Australians claim Lebanese ancestry. About 25,000 dual Australian-Lebanese nationals live in Lebanon.
The New South Wales Jewish Board of Deputies said there had been a rise in incidents of anti-Semitism, including graffiti and abusive phone calls and emails, since Israel launched its offensive against the militant group Hezbollah more than two weeks ago.