Prime Minister Julia Gillard his dismissed claims made by the Afghan soldier who shot three Australian troops last year as untrue and propaganda.
In a Taliban video, Mohammed Roozi has boasted about the shooting, claiming he killed 12 Australians.
Roozi was a member of the Afghan National Army when he seriously injured the Australian soldiers as well as two Afghan soldiers in Oruzgan province.
Ms Gillard said the video was propaganda.
"The actual claims about the numbers of deaths of Australian soldiers aren't true in this propaganda video," she told reporters in the flood-stricken town of St George in Queensland on Saturday.
"But the fact that there's this disgusting anti-Australian soldier propaganda anywhere in the world is offensive to me and to all Australians."
The prime minister said the claims were designed to corrode trust
"Propaganda is used by people like that to get people like you (journalists) to ask these sorts of questions," she said.
"It's aimed at trust. That's exactly what it's aimed at.
"It's aimed at denting our will. Well, no amount of propaganda is going to dent our will to get this mission done."
In the video, Roozi said he wanted to kill foreigners and teach them a lesson.
He said he was a Muslim and did not accept foreigners working alongside him.
Roozi said that after he shot the troops, he joined the Taliban.
Opposition Leader Tony Abbott echoed the prime minister's sentiments.
"I think Australians are entitled to be pretty disgusted at this conduct," Mr Abbott told reporters in Sydney.
"I think the fact that there was an element of betrayal in the deaths of these particular Australian soldiers adds an additional element of horror to it.
"But this is much more a comment on the malice of our enemies than it is on the merits of our cause."
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