Iran's ambassador to Australia should be expelled from the country over his comments praising Hezbollah's slain leader, Opposition Leader Peter Dutton says.

Mr Dutton this morning called for Iranian ambassador Ahmad Sadeghi's expulsion following his comments on social media labelling assassinated Hezbollah leader Hassan Nasrallah a martyr and "unparalleled leader".

He made the remarks late last month, the day Nasrallah was killed in an Israeli air strike.

Mr Dutton said Mr Sadeghi should not remain in Australia.

"I think the comments from the Iranian ambassador are completely and utterly at odds with what is in our country's best interests and the prime minister and the foreign minister should show the strength of character and expel him from our country," Mr Dutton said.

The ABC has contacted Foreign Minister Penny Wong for comment.

Speaking to reporters, Prime Minister Anthony Albanese condemned the ambassador's remarks but declined to say he should be expelled. 

"The government condemns any support for terrorist organisations such as Hezbollah. We condemn the ambassador's comments," Mr Albanese said.

"We have maintained a relationship with Iran since 1968 which is continuous. Not because we agree with the regime but because it is in Australia's national interest.

"It has never been an endorsement of the regime, but a channel to protect Australia's interests and to communicate our views and the views of our allies, like-minded countries."

But Shadow Foreign Minister Simon Birmingham said Australia should also take steps to ensure Iran's leadership was limited in their ability to "promote hatred" within Australia.

"We have seen multiple instances now, including just in the last week, of Iran's ambassador to Australia engaging in hate speech, undertaking statements that, were they to be said by an individual speaking at a rally in Australia, or a preacher in a place of worship, may well actually instigate legal proceedings against them," Senator Birmingham said. 

"Whilst [diplomatic immunity] may prevent him from being charged, it does warrant the case and necessitate why we believe he should be withdrawn from that diplomatic right within Australia."

Mr Dutton's expulsion call comes as the United States and Israel consider a military response to Iran launching hundreds of missiles into Israel.

He said the government must act far more strongly as conflict escalates in the Middle East, also calling for the government to move against planned pro-Palestinian protests on Sunday ahead of the one-year anniversary of Hamas' terror attack on Israel.

"The PM has to start showing some strength of leadership and some character here and standing up for our values and what is right, and it would start with a condemnation of the October 7 celebration, of the 1,200 deaths which is being proposed," he said.

"Israel wasn't firing rockets in defence on the 6th of October."

Iran's ambassador was called in by the foreign department in August over a separate social media post agitating for the violent removal of Israelis from "the holy lands of Palestine".