Foreign Minister Alexander Downer said Australia strongly supported Indonesia's defence of its territorial integrity by opposing Aceh separatists.
"If Indonesia as a state gradually broke up...it would set in place a chain reaction," Downer said on local television.
"You would have a disastrous security situation in southeast Asia. It would set people against people in the region," he said.
Downer said he was not concerned by the prospect of Aceh becoming an independent Islamic fundamentalist state, but by a break-up of Indonesia.
Australia never backed separatists in East Timor. But it sent troops there to restore order in 1999.
Blasts rock town
Meanwhile, fighting continued in Aceh. A series of explosions rocked a district town on Sunday.
Eyewitnesses said the explosions in the town of Lhokseumawe triggered off panic as people ran in all directions leaving their belongings behind.
|Fighting goes on in Aceh|
The blasts occurred about 150 metres behind the main market in the town. There were no immediate reports of any casualties. A military spokesman said rebels detonated three home-made bombs causing the explosions.
Insecurity on roads has also sparked off fears of food shortage, as the Aceh province has virtually been cut off from the rest of the country.
Vehicles have been a major target in the fighting. Indonesian forces sought to reassure frightened civilians by providing escorts for buses and trucks.
Indonesian troops have been battling the Free Aceh Movement rebels since May 19 in an attempt to quell the secessionist uprising in the province. The current round of fighting is the latest in the 27-year-old conflict for an independent Aceh.