Foreign Minister Stephen Smith said:
"Australia again repeats its call for the Burmese regime to release Aung San Suu Kyi immediately and unconditionally, and to release the more than 2000 political prisoners in Burma," he said.
"I have today instructed the Department of Foreign Affairs and Trade to call in the Burmese ambassador to express Australia's dismay at Aung San Suu Kyi's conviction and sentencing.
"Australia's ambassador to Burma is on my instruction also conveying the Australian Government's views directly to the Burmese regime.
"The regime still has the opportunity to set aside the conviction and sentence, release Aung San Suu Kyi and move down the path of national reconciliation."
Mr Smith said Australia would maintain sanctions against the military Junta.
"Australia will now consult closely with the international community, including the United Nations and Australia's ASEAN partners, on the need to put even more pressure on the Burmese regime to move down the path of democracy," he said.
"Australia maintains financial sanctions against the Burmese regime. The Government will now move to update these and keep them focused for maximum impact."
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UN chief Ban Ki-moon is "deeply disappointed" that Burma's democracy icon Aung San Suu Kyi was handed another 18 months of house arrest and demands her unconditional release, his press office says.
"The secretary general is deeply disappointed by the verdict in respect of Daw Aung San Suu Kyi [and] strongly deplores this decision," a UN statement said.
Mr Ban called on Burma's ruling generals "to immediately and unconditionally release Daw Aung San Suu Kyi and to engage with her without delay as an essential partner in the process of national dialogue and reconciliation."
"Unless she and all other political prisoners in [Burma] are released and allowed to participate in free and fair elections, the credibility of the political process will remain in doubt," he added.
A Burma court convicted the 64-year-old opposition leader at the end of a marathon trial for breaching the terms of her detention by the ruling military junta, following a bizarre incident in which an American man swam uninvited to her home.
Judges sentenced Suu Kyi to three years of hard labour and imprisonment, but military ruler Than Shwe signed a special order commuting the sentence and ordering her to serve out a year-and-a-half under house arrest.
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