The ALP Party Platform states that:

Labor is committed to supporting an enduring and just two-state solution to the Israeli–Palestinian conflict, based on the right of Israel to live in peace within secure borders internationally recognised and agreed by the parties, and reflecting the legitimate aspirations of the Palestinian people to also live in peace and security within their own state.

The Foreign Minister published an Opinion Piece on this topic (June 2013) where he said the starting point for final status negotiations should be the 1967 borders, and that all settlements are illegal;

The following is exerpts from a AUKMIN communique issued by the Australian Foreign and Defence Ministers with their UK counterparts  (Jan 2013);

"We agreed that there is a particularly urgent need at this time for progress on the Middle East Peace Process.  The UK and Australia call on the US to lead a major effort in 2013 to achieve a negotiated two-state solution with a secure Israel alongside a Palestinian state. 

History has shown that only the US has the influence and capability to bring both sides together.  Past progress has only been achieved through US leadership.  Strong US engagement is in the interests of Israelis, Palestinians and the wider region.  

Resolution of the Israeli Palestinian conflict will strengthen the forces of democracy and moderation throughout the Middle East.  The Palestinian Authority and the new Israeli government must engage seriously in negotiations without preconditions. 

Actions by both sides must be in the interests of peace.  Neither side should create obstacles to that objective.  We call on Israel to stop settlement activity.  All settlements are illegal under international law and settlement activity undermines the prospects for peace.  Australia and the United Kingdom expressed particular concern regarding the recent settlement announcements of the Israel Government including the proposed development of the E1 area. 

Australia and the United Kingdom both voted not to oppose enhanced Palestinian status in the United Nations.  We call on the Palestinian Authority to exercise restraint and avoid provocative actions at international forums.  Australia and the United Kingdom urge the Palestinians to resolve their internal differences, unite for peace and cease acts of violence against Israel.  In particular, we call for the Palestinians to abide by the terms of the Gaza ceasefire and to stop all rocket attacks.