Prime Minister Kevin Rudd said his center-left government had an "absolutely hard line" on defending the integrity of its passport system and took seriously allegations that suspected Mossad assassins had stolen Australian identities.
"That is why the foreign minister has called in the Israeli ambassador and asked for an explanation," Rudd told reporters.
"Thus far we are not satisfied with that explanation."
Canberra summoned ambassador Yuval Rotem on Thursday and warned that friendly ties were at risk if Israel was found to have sponsored or condoned the tampering of three Australian passports, linked to the killing of Mahmud al-Mabhouh.
Rudd said "very complex and security intelligence matters" were at stake.
"I wish to tread very carefully with the security and intelligence matters which arise in relation to each of the individuals and families concerned with this matter," he said,
"Therefore I'm choosing my words very carefully so as not to compromise any person or so as not to compromise any continuing investigation."
'No evidence of Israeli involvement'
The Israel-based Australians -- Joshua Daniel Bruce, Nicole Sandra McCabe and Adam Korman -- were among 15 named in connection with the killing of al-Mabhouh, who was found dead in his luxury Dubai hotel room on January 20.
Israeli ambassadors in four European countries have been summoned for talks and the European Union has also voiced outrage over the use of fake passports after an earlier list of 11 people was released.
Dubai police strongly suspect Mossad, Israel's secret service, of carrying out the hit and have called for the arrest of the spy agency's chief.
Israel has sought to play down the row, saying there is no evidence of its involvement. It has rejected the calls for the arrest of Mossad's chief as "baseless" and "absurd".
Meanwhile, The Independent reported Saturday that investigators from Britain's Serious Organized Crimes Agency (Soca) have arrived in Israel to begin interviews with dual nationals whose names were used on forged passports used by Mabhouh's assassins.
Soca confirmed Friday that arrangements were already being made to speak to the six British-Israeli dual nationals whose names appeared on the 11 passports originally revealed by Dubai police last week to have been used by members of the hit team, the British newspaper's website said.