Prime Minister John Howard warns a military strike against a "crazy" North Korea may be necessary to pull it into line over its nuclear test - but only as a last resort.
North Korea has become an international pariah since launching a nuclear test this week, earning the condemnation of the United Nations.
The world body is now trying to determine exactly what sanctions it should take against Pyongyang.
The UN Security Council is expected to vote within days on action proposed by the United States, including financial and trade sanctions, and international inspections of all cargo entering and leaving North Korea.
However, China still has to be convinced that such tough measures are necessary.
China's ambassador Fu Ying revealed that she had discussed the issue with foreign affairs officials.
"At the United Nations, there is a very substantive discussion and I, myself, have been engaged in discussion with the Australian DFAT as well," she said.
Mr Howard labelled North Korea a "seriously crazy regime", which would not even listen to its close friend China.
He said world leaders until last week hoped China's historic influence on the rogue state would restrain it, but it did not seem to be the case.
"Now I do hope the world can speak through the United Nations with one voice," Mr Howard told Southern Cross Broadcasting.
"But the options in a situation like this are limited.
"Nobody wants to look at military options, you can't take them off the table, you never do that, that's foolish.
"Nobody really wants to look at that as an option but they are very limited and we are dealing with a seriously crazy regime."
Foreign Minister Alexander Downer urged other countries to follow the lead of Japan, which has imposed its own sanctions against North Korea.
These include a ban on North Korean vessels calling into Japanese ports, a ban on the importation of North Korean goods and a ban, except in special circumstances, on nationals visiting Japan.
"We encourage the international community to consider the measures Japan has taken and where it's relevant and where possible to take similar, proportional steps," he said.
Australia has already stopped North Koreans visiting except in special circumstances.
"Japan's steps, like our own, takes care to avoid to imposing additional pain on the long-suffering ordinary people of North Korea," Mr Downer said.
