At least 20 people were killed in the attack overnight, including five journalists working for international media.
Environment Minister Murray Watt said on Tuesday it was a “breach of international law”.
“We utterly condemn this action and it’s yet another outrage in a war that’s gone on too long and cost too many innocent lives,” Senator Watt told the ABC.
“It’s very clear that targeting or hitting hospitals, health workers and civilians is a breach of international law.
“We join with the rest of the international community in condemning this action.
“We can’t speak for Israel’s intent in this, but it appears to be a clear breach of international law and these sort of incidents have got to stop as we find a ceasefire and peace in the Middle East.”
The journalists killed were working with Reuters, the Associated Press, Al Jazeera and the Middle East Eye.
Four health workers with the World Health Organisation were also killed, the UN agency said.
Israeli Prime Minister Benjamin Netanyahu has acknowledged the strikes and it was a “mishap”.
“Israel deeply regrets the tragic mishap that occurred today at the Nasser Hospital in Gaza,” Mr Netanyhu posted on social media.
“Israel values the work of journalists, medical staff, and all civilians. The military authorities are conducting a thorough investigation.
“Our war is with Hamas terrorists. Our just goals are defeating Hamas and bringing our hostages home.”
More to come.
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