Australia has expelled an Israeli diplomat after a police investigation found Israel was responsible for the forging of Australian passports used in the murder of a Hamas leader in Dubai.

At least four forged Australian passports have been identified as being used in the murder of Mahmoud al-Mabhouh in Dubai in January, along with passports from the UK, France, Ireland, and Germany. The passports reportedly belonged to Australians living in Israel.

Australian Foreign Minister Stephen Smith said a police investigation had concluded Israeli authorities were behind "the abuse and counterfeiting of the passports".

Mr Smith said the forgeries were "not the actions of a friend" and as a result he had asked Israel to withdraw a diplomat, who has not been identified.

"The decision to ask Israel to remove from Australia one of its officers at the Israeli embassy in Canberra is not something which fills the Australian government with any joy," he said. "On the contrary, the decision was made much more in sorrow than in anger."

Britain expelled Israeli diplomats in March after a similar investigation found Israel had forged British passports used in the killing.

The Israeli government has maintained there is no proof that agents from its spy agency Mossad were behind the murder, but Dubai investigators say they are almost 100 percent sure Mossad was responsible.

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