Australian Federal Police will investigate whether independent senator Lidia Thorpe broke laws by saying she is prepared to "burn down Parliament House" in support of Palestinians.
Senator Thorpe said her remarks at a pro-Palestine rally were "clearly" a figure of speech.
But in a rare public statement, the AFP confirmed it would consider whether the comments breached legislation.
"This will be done methodically," an AFP spokesperson said.
"It is not the usual practice of the AFP to provide a running commentary on matters.
"However, noting the public commentary and concern, the AFP is seeking to reassure the community that this issue is being appropriately considered and undertaken in a timely manner."
At a rally in Melbourne on Sunday, the firebrand senator for Victoria compared the plight of Palestinians to that of Indigenous Australians.
"So we stand with you every day, and we will fight every day and we will turn up every day and if I have to, burn down Parliament House to make a point," she said, to cheers from the crowd.
The comments sparked a political firestorm, with Home Affairs Minister Tony Burke urging leaders to avoid inflaming community tensions.
He said the natural instinct when "offensive" comments were made was to "increase the pressure."
"I don't think that's in the interests of social cohesion," he told reporters in Canberra.
He said her comments "speak for themselves ... but I also don't think us raising the temperature in return does anything other than create a problem".
Senator Thorpe clarified her comments on Monday, saying they were "a metaphor for the pain in our communities".
"They were obviously not a literal threat," she said in a statement.
"This mock outrage is ridiculous. While people are dying and starving in Gaza, politicians and media are once again clutching their pearls and chasing a scandal."
The independent senator said she rejected violence and was committed to pursuing justice through peaceful, democratic means.
Deputy Liberal leader Ted O'Brien said the comments went against Australian values.
"To be making those sort of statements are absolutely appalling ... and to hear the roar of the crowd, that's deeply concerning," he said.
Both sides of politics hope the release of Israeli hostages and the next stages of the ceasefire deal in Gaza will help soothe community tensions at home.
The remaining Israelis held captive by Hamas since the October 7, 2023, attacks by Hamas were released later on Monday afternoon.
About 1000 people packed into Melbourne's Beth Weizmann Jewish Community Centre to celebrate and watch a live stream of the scenes in Israel.
"When the remaining bodies get returned, we'll all be very relieved," Melburnian Nadine Levitan told AAP.
"It's amazing, just the feeling of peace."
Israel in exchange will release about 2000 Palestinians, including senior militants and those held without charge under what is known as administrative detention.
Jewish groups also held rallies on Sunday night to pay their respects to the 1200 people in Israel who died and the 250 who were taken hostage by Hamas two years ago, sparking the war.
