Goals from Hibernian striker Jamie Maclaren, Awer Mabil and substitute Apostolos Giannou put the much-improved Socceroos second in Group B with one game to go.
The Aussies will now go into next Tuesday's final group game against Syria with renewed confidence after banishing memories of their 1-0 upset at the hands of Jordan.
Coach Graham Arnold dropped the under-performing Massimo Luongo and Robbie Kruse in favour of Jackson Irvine and Chris Ikonomidis, who impressed as substitutes against Jordan.
And it was a far more dynamic team that opened their account on 18 minutes, when Celtic's Tom Rogic picked out Maclaren who scored his first international goal with a glancing header.
Two minutes later and gold-clad Australia were 2-0 up as Ikonomidis lofted a ball to the far post where Mabil sneaked in unmarked for a first-time finish.
Mabil could have doubled his tally before half-time but he skied his shot after a neat move through the middle involving captain Mark Milligan and Maclaren.
But Australia kept up their assault after the break as Palestinian defender Abdallah Jaber knocked an attempted clearance onto his own crossbar and Irvine headed just over.
The attacks kept coming and substitute striker Giannou, a late call-up after Scottish-born Martin Boyle was injured, nodded a deserving third for Australia in the final minute.