Prime Minister Anthony Albanese has called for an end to the "cycle of violence and terror", as he commemorated the second anniversary of October 7.
Albanese opened Question Time, recalling the Hamas-led attack on Israel, during which more than 1,200 Israelis were killed and 200 hostages taken, according to the Israeli government.
He said his government stands with Jewish people around the world "who feel the cold shadow of history's darkest chapter in any act of antisemitism".
"Hamas sought to kill and to terrify. They planned a nightmare of scarcely comprehensible cruelty and made it a reality," Albanese said about Hamas, which Australia has designated a terrorist organisation.
The two-year war has killed more than 66,000 people in Gaza, according to its health ministry, with many of those still alive exhausted, displaced and hungry — with little hope of the war ending even as peace efforts resume.
He welcomed efforts by United States President Donald Trump to broker peace in Gaza.
"A future without Hamas, and a future that encompasses two states — the state of Israel and the state of Palestine, living side by side within internationally recognised borders, and recognising each other's right to live in peace and security," he said.
"That is the possibility of the future that is before us. It is our duty to do everything in our power to seize it."
Albanese said he would meet with the brother of Australian Galit Carbone, killed in the October 7 attack, who sat in the gallery.
Opposition leader Sussan Ley recalled the merciless cruelty of the attack, stating that "women were raped, children were massacred, and the frail were struck down and tortured".
Ley said the date was a "brutal reminder of the depths of human cruelty and of the evil that flourishes when hatred is armed".
She criticised the Albanese government for "dragging its feet listing Iran's Islamic Revolutionary Guard Corps as a terrorist organisation" as well as its antisemitism response more broadly.
"Two years on, Australia has failed to stand firm in the face of terror. Australia has been lauded by Hamas and condemned by Israel and by the United States," she said, eliciting murmurs of disapproval in the chamber.
Ley called for the stamping out of antisemitism, which includes acting on the recommendations of the government's first antisemitism envoy, Jillian Segal.
"To Israel, to survivors, to the Jewish people everywhere, you are not alone. We stand with you in grief, in solidarity, and in the unbreakable hope that life will triumph over terror," she said.
Leaders condemn 'abhorrent' pro-Hamas graffiti
Earlier in the day, both leaders criticised the defacing of a Melbourne billboard with pro-Hamas graffiti on the October 7 anniversary.
Victoria Police is investigating the painting of "Glory to Hams" on a billboard in Fitzroy, in Melbourne's inner-north.

Police are investigating how the message came to be painted on the billboard in Melbourne's Fitzroy. Source: AAP / Joel Carrett
"The people responsible must face the full force of the law. The AFP [Australian Federal Police] will work with Victorian police to bring them to justice," he said.
Ley said the hateful graffiti was "deeply disturbing", stating that support for Hamas "is not free speech, it is a crime".
Meanwhile, Victorian Premier Jacinta Allen said the graffiti was "so deeply wrong and offensive".
"My thoughts and heart goes with the Jewish community today and everyone in our community who is striving for peace and harmony. This is not achieving that outcome."