Speaking in Perth, she said the nation`s deadliest incident in the conflict since three soldiers were killed in a helicopter crash in 2010 would concern Australians.
"I well and truly understand that when you see losses in Afghanistan, in particular when you see losses of this kind, that it does cause the Australian people to question our deployment in Afghanistan," she said.
Thirty-two Australian troops have been killed so far in the conflict but Gillard said Canberra would not be deterred from its mission of training and mentoring Afghan soldiers in restive Uruzgan province.
"We are there because it`s in our national interests to be in Afghanistan," she said, adding that Australia`s 1,550 soldiers were making progress and had a defined mission.
"We cannot allow our will to be undermined by incidents like this."
The Australian Defence Force is investigating the incident in Kandahar province on Saturday in which an Afghan National Army soldier shot at a parade, killing a corporal, captain and lance corporal.
General Abdul Hameed, commander of 205 Atal corps in the south, said an Afghan soldier with three years` experience had carried out the shooting, in which an Afghan interpreter also died, and was gunned down by foreign soldiers.
Fears of infiltration within the Afghan army ranks have risen as Western backers fund and train a huge expansion of the fledgling national force ahead of the withdrawal of all foreign combat forces scheduled for 2014.
In June, Australian Lance Corporal Andrew Jones was shot dead by a rogue Afghan soldier.
"We have been a nation that has suffered very, very deeply this year with casualties in Afghanistan," Gillard said. "I am unbelievably conscious of that.
"I am also very conscious of the need to see the mission through."
Defence Minister Stephen Smith said Australian forces would not be in Afghanistan "forever" but would not depart now.
"If we were to leave now the Afghanistan/Pakistan border area would again become a breeding ground for international terrorism, and Australians have been on the receiving end of international terrorism," he said.
AFP
Editor: Jafar M Sidik
Copyright © ANTARA 2011
