Labor 'dreaming' with Gaza claim, activists vow rallies

The prime minister has been scorned for suggesting he helped build momentum towards peace in Gaza as Palestine supporters push ahead with controversial protests around the anniversary of the deadly Hamas attack on Israel.

Anthony Albanese has welcomed progress on a peace plan between Israel and Hamas, with US President Donald Trump revealing Israel has agreed to a limited troop withdrawal as negotiations for a ceasefire and hostage release continue.

Mr Albanese said there was no question Australia's decision to recognise Palestinian statehood at a recent United Nations meeting, alongside allies the UK, Canada and France, played a minor role in helping the move towards peace.

Industry Minister Tim Ayres echoed the sentiment, saying Australia was regarded as a genuine player by its partners and had helped build momentum.

The nation was playing the role its people expected as a middle power engaging with world partners on the question of statehood, including advocating for a ceasefire and working to bring strong consensus for adhering to international law, he said.

"In terms of statehood, of course, it's part of creating momentum towards a peaceful settlement," Senator Ayres added.

But opposition frontbencher Melissa McIntosh poured scorn on the suggestion by channelling Darryl Kerrigan from the Australian 1990s cult film The Castle.

"Tell the PM he's dreaming if he thinks that he had a whole lot of influence," she said.

"President Trump and the US administration, it seems, were working on this for some time and actually publicly said that Australia's position on this was more of a hindrance than a help."

Announcing his 20-point peace plan, Mr Trump called countries that had recognised Palestine "foolish" but acknowledged their frustration over a lack of progress on the issue.

Australians continue to voice their opposition to Israel's assault on Gaza, which has killed more than 66,000 people, according to local health authorities.

Days from the two-year anniversary of the October 7 Hamas attacks on Israel, which killed 1200 people and resulted in hundreds more being taken hostage, hundreds of pro-Palestine protesters filled the streets of Melbourne on Sunday.

Activists in Sydney are going to the NSW Supreme Court for approval for a rally at the Sydney Opera House forecourt in a week, which police oppose on safety grounds.

Ms McIntosh urged the state government to use all levers to block the "disrespectful" rally.

"There's nothing respectful in having a protest at the Opera House, one of our most well-known, recognised icons, at that point in time," she said.

Speaking outside Victoria's State Library, Ihab Al Azhari called for a rally in Melbourne in a week to recognise two years of "the occupying, killing and ethnic-cleansing of Palestinians".

"It's really important to send this message to the Zionists: we are millions of millions on this planet and every one of us, regardless of our colour, our skin, our age, where we're born, we're all Palestinians," he told the crowd.

"We all celebrate the winning and the victory of the people of Gaza, people of West Bank, people of Palestine."

Federal Greens leader Larissa Waters called on the government to expel Israel's ambassador if six Australians on board a flotilla detained by Israel were not freed and allowed to return home.