Former Defence Force chief Peter Cosgrove has defended Australian soldiers involved in the Facebook racism scandal in Afghanistan.

Defence is investigating racist comments and video posted on the website by Australian soldiers.

Videos broadcast on Thursday night by Channel Seven show soldiers referring to Afghans as "sand coons", "dune coons","niggers" and "smelly locals".

Another is referred to as a "raghead".

When a local man was shown running away from an explosion, a soldier was heard to say the blast "scared the f*** out of that mufti".

A number of soldiers also list their employer as a "f***ing ranga", a reference to Prime Minister Julia Gillard.

Defence Force chiefs have described the comments as appalling and unacceptable.

But General Cosgrove, chief of Defence between 2002 and 2005, says the "silly" comments need to be kept in proportion.

He says the soldiers are putting their lives on the line for Afghans and deserve no more than a "slap on the wrist".

"I think by their deeds they belie the few comments that have been posted," he said.

"Every time they go outside the wire they are targets and they accept that cheerfully.

"I think in Australia, across the board, there are racist elements, sadly. I don't think the Defence Force is anything other than a microcosm of the wider society.

"I think they should be counselled - but that's a matter for the Army.

"Remember that these kids are actually, by their deeds, showing they see a worthwhile mission for which they're prepared to accept great danger."

The soldiers involved have been warned they could be discharged or face jail.

Defence Minister Stephen Smith says Defence will pursue the matter to the end.

"It also includes the possibility of people who are associated or involved with this, if they are in Afghanistan, being returned home," he said.

Some military experts have warned the issue could damage the Australian force's relationship with Afghanistan.

Mr Smith says he has telephoned his Afghan counterpart to apologise on behalf of Australia.

He says he told the Afghan minister he did not want the issue to lower Australia's standing in the country.

"He said that in his mind it would not because he appreciated very much and respected very much the way Australian soldiers conduct themselves, both in terms of sticking to sensible rules of engagement, engaging with the local people and when things go wrong, fessing up to them and taking remedial action."

'Deeply embarrassed'

The Chief of Defence, Air Chief Marshal Angus Houston, say he is appalled by the postings.

"What was on those videos particularly disturbed me. It's unacceptable, inappropriate and just does not conform with our values in the Defence Force," he said.

"This flies in the face of what we are trying to achieve in Afghanistan. We are trying to win the hearts and the minds of the people.

"This is not good for us in Afghanistan. There's no doubt about that. I'm deeply embarrassed about what's happened.

"I just hope the Afghan people appreciate that this is a minority, an act of insensitivity and act of stupidity.

"Once we have determined the facts we will take swift action."

Opposition Leader Tony Abbott says the racist remarks are unfortunate.

"Australia is probably about the most tolerant and easygoing society on Earth," he said.

"Now that doesn't mean that occasionally people don't go over the top and say something that they shouldn't, but Australians are as easygoing, as genial and as tolerant as any people on Earth."

Dr Ben Wadham, an expert on army culture from Flinders University in Adelaide, says combat stress could be a factor in the behaviour.

"These soldiers are under a lot of stress in Afghanistan - one of the key stresses is the inability to understand the difference between civilians and insurgents," he said.

"That blurring of the line perplexes soldiers to some extent. What soldiers do in that sort of a situation is to talk pejoratively about the Afghani people and to dehumanise them.

"That video shows those soldiers dehumanising the Afghani people."

The Islamic Council of Victoria's vice-president, Razmi Elsayed, has expressed concern about the Facebook comments, saying racist remarks create division and misunderstanding.

"I think it's a disease of the heart," he said.

"Racism is a disease of the heart, and ultimately those diseases need to be attended to. And one of the ways that we try to do it externally for the Muslim community is through the process of engagement."