The federal government has accused the Greens of lying about Australia's involvement in the Gaza war for political advantage and to sow division in the community.
A $917 million contract with Israeli weapons manufacturer Elbit Systems has come under scrutiny in recent months.
Defence Industry Minister Pat Conroy said the agreement for defence vehicles was awarded to Hanwa Defence Australia, which then subcontracted the work out.
Mr Conroy said Australia does "have control and input" over subcontracts but stressed the nation was not supplying arms or ammunition to Israel.
"What the Greens have been doing has been lying to the Australian public about Australia's involvement in the conflict in order to further social division for short-term political advantage," he told ABC Radio National on Monday.
"You saw that last week where they continued to lie about Australia's supplying arms and ammunition to Israel and that is hurting our communities, dividing our community and it has to stop."
Mr Conroy said Australia had only approved export permits to Israel for equipment returning to the Australian Defence Force since the conflict began, accusing the Greens of effectively calling for a boycott of Israel.
"Does that mean that, for example, Qantas and Virgin should be banned from buying 737s from Boeing because Boeing has sold F-15 fighter jets to Israel?" he said.
"This is a policy of boycotting of Israeli business or boycotting businesses that may have provided platforms to Israel when ultimate responsibility lies with the Israeli Defence Force."
Greens senator David Shoebridge said claims the government isn't involved in a contract with Elbit Systems "is too ludicrous to give a detailed response".
"Australia was required to consent to the subcontract with Elbit and the government engaged closely on the contract," he said in a statement.
He accused Australia of having "two-way arms trade with Israel" and suggested military exports to Israel could be "washed through a third country" by manufacturing supply chains.
Last week, Greens leader Adam Bandt threatened Attorney-General Mark Dreyfus with legal action over claims the minor party's MPs had encouraged pro-Palestinian protests that led to several electorate offices being damaged.
