Withdrawing from the International Criminal Court in protest can't be ruled out, Mr Dutton said.
His assertion follows a finding by chief prosecutor Karim Khan that are reasonable grounds to suspect Israeli ministerial involvement in possible war crimes, including starvation and intentionally attacking civilians.
There are similar grounds to suspect three Hamas commanders committed crimes against humanity including murder, sexual violence and hostage-taking, he said.
A coalition government might consider walking away from the International Criminal Court. (AP PHOTO)
Mr Dutton branded the decision to seek warrants for Prime Minister Benjamin Netanyahu and Defence Minister Yoav Gallant an "obvious anti-Semitic act" and called for it to be reversed.
He also chastised the prime minister for not condemning the prosecutor's actions, after Anthony Albanese said Australia respected the independence of the court and didn't comment on matters before it.
"The Jewish community is completely and utterly bewildered", he said on Thursday in reference to Mr Albanese's statement.
Cabinet Minister Ed Husic said it was "staggering" that the coalition talked big about law and order and then turned its back on a court of law "on the basis of something that is uncomfortable to them".
There was no finding by the ICC of moral equivalence between Israel and Hamas, which is a designated terrorist organisation in Australia, Mr Husic reiterated.
"People are being charged on the basis of individual action," he told ABC radio.
Ed Husic (right) says it's staggering the opposition has turned its back on a court of law. (Mick Tsikas/AAP PHOTOS)
However Liberal MP and former Australian ambassador to Israel Dave Sharma said Australia should be "examining our options and our future co-operation with the court" if the warrants are granted.
His argument was based on legal complications, he said, pointing to the court not being able to come over the top of a domestic legal system's investigations.
When Israel made a mistake, it was quick to investigate, apologise if at fault and take steps to address shortcomings, he said.
"Everything I've seen indicates to me Israel is doing its utmost to comply with the principles of international humanitarian law," Senator Sharma told Sky News.
If the court agreed with the warrant, "then I think the time has come for Australia to stand up", Liberal colleague and chair of the Australia-Israel Allies Caucus Andrew Wallace said.
"Say, 'you know what, this was a bad move, the United States got it right, they refused to be a part of it in the first place'."
Liberal MP Aaron Violi also backed in Mr Dutton's comments, telling AAP he rejected the insinuation of equivalence between Israel and Hamas.
Hamas attacked Israel on October 7, killing 1200 people and taking more than 200 hostages, according to Israel, while a counter-offensive in Gaza has since killed more than 35,000 people, according to the local health ministry.
