Benjamin Netanyahu has touched down in Sydney for a four-day visit — the first visit to Australia by a serving Israeli Prime Minister.
He is travelling with a business delegation, and is expected to sign bilateral agreements on technological research and air services.
Mr Netanyahu said the visit would strengthen relations.
"We admire Australia, we embrace Australia and this visit will enable us to bring our countries even closer," he said.
"I've been here before and counted the years wanting to come back again and I'm very proud to be here as the first Israeli Prime Minister to make an official visit to Australia."
Mr Netanyahu acknowledged the historical ties between the two countries.
"We're celebrating 100 years of friendship between Australia and Israel," he said.
"I always remember, it was Australian light horse that liberated Beersheba, an old, old city in our history.
"We have been friends — extraordinary friends — ever since."
Tight security arrangements for visit
Security agencies have been preparing for demonstrations against Mr Netanyahu over Israel's policies on its Palestinian neighbour.
A group of 60 prominent people are opposed to the visit, saying his policies provoke, intimidate and oppress.
There was a heavy security presence at Sydney Airport as he arrived.
An escort of 14 motorcycle police plus patrol cars will shepherd him into the city where he will meet with Prime Minister Malcolm Turnbull and the Governor General, Sir Peter Cosgrove.
Talks with Labor leader Bill Shorten are also scheduled during the four-day visit.
Sydney motorists have been advised CBD traffic changes and special clearways are now in place at Phillip Street between Bridge Street and Albert Street due to the visit.
Calls for Palestinian state to be recognised
In the past week, ahead of Mr Netanyahu's visit to Australia, former prime minsters Mr Rudd and Bob Hawke, along with former foreign ministers Gareth Evens and Bob Carr, have called for the Palestinian state to be recognised.
"Bob Hawke's been a fierce supporter of Israel over the years, but he sees what's happening," Mr Carr said.
"We've really been conned, there's no intention by the leaders of Israel to carve this out. They were looking at spreading settlements to change the facts on the ground and make the Palestine state impossible."
Palestinian officials labelled Australia's position on the Middle East peace process as "extreme" and "one-sided". They have said the Turnbull Government's actions in recent months meat it could not be an honest broker on the Israel-Palestinian conflict.
"This is certainly strange," Palestine Liberation Organisation (PLO) executive member Hanan Ashrawi said.
"They have become more Zionist than the more ardent Zionists. This kind of attitude would disqualify Australia in any kind of role in peacemaking."
Mr Netanyahu and his delegation will be in Sydney from today through to Sunday.