The industry and science minister said Australia needed to acknowledge the human impact on Palestinians.
Hamas killed 1400 people in Israel in a rampage on October 7 and Israel has vowed to eradicate the group in response.
"I feel very strongly that Palestinians are being collectively punished here for Hamas' barbarism," Mr Husic told ABC Radio on Thursday.
"I really do feel there is an obligation on governments, particularly the Israeli government, to ... follow the rules of international law and to observe in particular that innocence should be protected."
Mr Husic said Palestinians had been dehumanised.
"I've heard some pretty strong language references to Palestinians as human animals," he said.
"It's just wrong.
"And references to collateral damage, that's wrong."
Mr Husic said he was concerned a two-state solution wouldn't eventuate in the Middle East when the current violence ended.
Palestinians were living under occupation, he said.
Coalition frontbencher Jane Hume called out Mr Husic for "loose language" and called on the prime minister to admonish him for parting ways with the government's position.
"Israel has the right to defend itself," she told Sky News on Thursday.
"There is a limit to what we can do over here other than make sure our support for Israel is unequivocal."
Jane Hume: Israel has a right to defend itself.
Israeli military spokesman Jonathan Conricus said the claim Palestinians were being collectively punished was "unfounded" and the IDF conducted itself according to the laws of armed conflict.
But Amnesty International campaigner Nikita White welcomed Mr Husic's comments and called the collective punishment of civilians a war crime.
"You cannot punish civilians for the actions of an armed group," she told reporters at a pro-Palestine protest in Canberra.
Greens leader Adam Bandt called on the government to condemn Israel's invasion and bombing of Gaza."We are seeing hospitals bombed, people are starving, people are dehydrating and the United Nations has said the directions for people to leave their homes is unlawful," he said at the protest.
Palestinian ambassador Izzat Salah Abdulhadi said he would meet with Foreign Minister Penny Wong to call on Australia to strongly condemn attacks on civilians in Gaza.
A Qantas flight landed in Sydney on Wednesday evening with 126 Australians and 43 of their immediate family completing onward travel for those who departed from Tel Aviv in recent days.
The plane also carried 65 citizens of the Solomon Islands and 18 from Vanuatu.
Passengers have been welcomed home by family and friends after arriving at Sydney airport.
Senator Wong warned Australians to leave Israel and take any opportunity possible amid the "highly challenging and rapidly changing" situation.
Officials say more than 1500 Australians registered with the Department of Foreign Affairs have left Israel and the occupied Palestinian territories.
About 1200 Australians are in contact with the government and receiving updates about returning home amid the conflict in the Middle East.
The government is also working to support Australians to leave the West Bank as it liaises with international partners to arrange transport to Jordan.
Hundreds were killed in a Gaza hospital blast, which Hamas has blamed on Israel.
Israel countered that there was clear evidence it was caused by a rocket misfire from Palestinian militant group Islamic Jihad.
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