Australia, a close US ally, was one of the first nations to commit troops in late 2001 to the US-led war to oust the Taliban and al-Qaeda from Afghanistan.
"The operation in Afghanistan involves resisting brutal terrorism. It's a just cause, and this soldier was part of an Australian contribution to that just cause," Howard said.
"It's a just cause, and this soldier was part of an Australian contribution to that just cause"
John Howard, Australian PM
The defence department said the wounded soldier's injuries were not life-threatening.
The death comes before national elections in Australia in which the Iraq war will be a major issue, with opposition Labour promising to withdraw troops from Iraq but keep soldiers in Afghanistan.
Australia has about 950 troops deployed in Afghanistan, but the number will grow to more than 1,000 by the middle of 2008.
It also has about 1,500 troops in and around Iraq.
Howard, who is expected to call a poll within days to seek a fifth term, had not previously had to face a combat fatality in either Iraq or Afghanistan.
An Australian special forces soldier was killed in 2002 when his vehicle hit a landmine in southern Afghanistan, but Monday's death was the first from a direct attack.
Opinion polls show Australians are widely opposed to the Iraq war and have begun to lose faith in Howard's tough stance, which had won him previous elections.
Taliban fighters have been intensifying their attacks over the past 20 months, the bloodiest period since US-led troops overthrew the Taliban government in 2001.
Last month, three Australians were wounded during a firefight with Taliban forces near Tarin Kowt, also in Uruzgan province, Australian media reported.
In August, two Australian soldiers were wounded in a shootout with fighters, and in June, an Australian survived a car bomb attack that killed a Dutch soldier and six civilians.