Israel's parliament on Monday voted to make hanging a default sentence within 90 days of sentencing for Palestinians in Israel and the occupied West Bank convicted in military courts for killing Israelis.
A total of 62 of 120 lawmakers in the Knesset backed the bill in a final vote on Monday, including Prime Minister Benjamin Netanyahu.
Ambassador Hillel Newman, who grew up in apartheid South Africa, defended Israel as a democratic and equal society saying the laws were necessary.
"The usual punishment is no deterrent... we needed extra deterrents," he told the National Press Club in Canberra on Tuesday.
More than 50 countries have the death penalty on the books including the US and Japan, according to Amnesty International, which the ambassador drew upon in defending the laws.
"Just like in the United States, in Japan and in India, which have capital punishment, Israel has the right, as a sovereign state, to decide … capital punishment."
He said safeguards were also introduced to ensure an appeal process is enacted.
But it has drawn sharp criticism from the United Nations and several governments, including Australia in a joint statement with France, Germany, Italy and the United Kingdom.
They said on Sunday the law's "de-facto discriminatory character" was a worrying development that undermined Israel's international standing.
Mohamed Duar, Amnesty International Australia's spokesman for the Occupied Palestinian Territories, lambasted the laws for specifically targeting Palestinians and creating two legal frameworks.
"This law is extremely dangerous as it effectively gives a licence to kill for the Israeli government," he told AAP on Tuesday.
He said the odds were stacked against Palestinians with military courts recording an almost 100 per cent conviction rate and putting thousands of children on trial.
Other advocacy groups such as the Australia Palestine Advocacy Network also slammed the extreme nature of the law pointing to how it further entrenches oppression.
"This law is a grotesque escalation of Israel's violence against Palestinians. It takes a system built on torture, starvation, sexual violence and indefinite detention, and adds execution," the group said.
"This is not justice, it is a system of organised cruelty formalised into law."
The legislation has been heavily promoted by Itamar Ben-Gvir, the far-right national security minister who wore noose-shaped lapel pins in the run-up to the vote.
The National Israel Fund's Australian executive director Kate Rosenberg, described it as a "moral and legal disaster".
"It violates fundamental human rights, undermines Israel's standing in the world, and gives extremist political actors unprecedented power over life-and-death decisions."
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