The diplomats have been told to report to Mr Rudd on the conditions they find at the Ofer military prison, near Jerusalem.
According to a statement from Mr Rudd’s office, he has also instructed Australian officials to initiate a meeting with Israeli authorities to raise concerns about the system under which Palestinian children are tried.
Sixty of Israel’s leading psychologists, academics and child experts have written to Israeli Prime Minister Benjamin Netanyahu saying that "offensive arrests and investigations that ignore the law do not serve to maintain public order and safety".
The Weekend Australian Magazine reported that allegations included : a boy kept in solitary confinement for 65 days ; other boys in solitary confinement with the lights on 24 hours a day ; a seven-year-old boy in Jerusalem taken for interrogation who says he was hit during questioning ; three children being given electric shocks by hand-held devices to force them to confess ; dog’s food being put on the head and near the genitals of a blindfolded boy and a dog being brought in to eat it while his interrogators laughed.
The magazine reported that, since January, 2007, Defence of Children International has collected and translated into English 385 sworn affidavits from Palestinian children held in Israeli detention who claim to have suffered serious abuse : electric shocks, beatings, threats of rape, being stripped naked, solitary confinement, threats that their families’ work permits will be revoked and "position abuse" - which involves a child being placed in a chair with their feet shackled and hands tied behind their back, sometimes for hours.
A 10-year-old boy testified : "A soldier pointed his rifle at me. The rifle barrel was a few centimetres from my face. I was so terrified that I started to shiver. He made fun of me and said, ’Shivering ? Tell me where the pistol is before I shoot you’."
A 15-year-old boy testified that he was tied to a metal pipe and beaten by a soldier and that an interrogator placed a device against his body and gave him an electric shock, saying : "If you don’t confess I’ll keep shocking you." He said the interrogator gave him another electric shock, at which point he could no longer feel his arms or legs, felt pain in his head and confessed.
Gerard Horton, an Australian lawyer dealing with many of the cases in his role at DCI, said one Israeli interrogator working in the settlement, Gush Etzion, "specialises in threatening children with rape" to get confessions.
One woman involved in the YMCA’s rehabilitation program for children who have been under Israeli detention, Fadia Saleh, told The Australian as part of its investigation : "Last week, one boy described to me how dogs were present in the army jeep. In those jeeps, you have chairs on each side and an empty space in the middle - the children are put there, on the floor. Sometimes soldiers step on them.
"Every time the child moved, one of the dogs would bite him. When he arrived at the interrogation centre, his arm was bleeding. It was a short trip but he felt like (it was) a year."
The Weekend Australian Magazine reported that, while diplomatic and parliamentary missions from many countries had visited the juvenile court, Australian diplomats had appeared to show no obvious interest in the court.
Mr Horton said Australia had been "conspicuously silent" about possible human rights abuses against Palestinian children.
He told the magazine : "It is disappointing that, of all the diplomatic missions in the region, Australia has been conspicuously silent on the issue of the military courts."
Australia’s Ambassador to Israel, Andrea Faulkner, was told of the treatment of children more than a year ago.
Although informed of the issue, neither Ms Faulkner nor any other Australian representative has visited the court.
The Weekend Australian Magazine was given rare access for the media to the court - it was allowed to visit on three separate occasions over the last year, with the Israeli Defence Forces, as part of this investigation.
This week, an Australian official has begun meetings on the issue in preparation for a visit to the juvenile court by Australian diplomats.
Most of the children before the military court are charged with stone-throwing and sentenced to prison terms ranging from two weeks to 10 months.
The Israeli Defence Forces reported at least 2766 incidents of rock-throwing against them or passing cars this year.
Israeli police say a crash in September in which a man and his infant son were killed may have been caused by a rock hitting their car.
Authorities in Israel did not want to discuss individual cases of children but the country’s international spokesman Yigal Palmor said there were "many things" that needed to improve and that Israel was working with human rights groups and making "slow reform and improvement".
The treatment of Palestinian children in the West Bank, which is under Israeli military occupation, is in contrast to the treatment of children in Israel.
In Israel, a child cannot be sent to jail until the age of 14, while Palestinian children are being jailed from the age of 12 ; in Israel a child cannot be interrogated without a parent present ; in Israel a child cannot be interrogated at night, while most of the Palestinian children being taken from their homes are detained between midnight and 5am ; in Israel the maximum period of detention without access to a lawyer is 48 hours, while in the West Bank it is 90 days.
In recent times, the military court has been visited by diplomats or parliamentary delegations from the UK, the US, the European Union, the Netherlands, France, Spain, Belgium, Germany, Ireland, Norway, Cyprus and the United Nations.
Mr Horton says that before most cases are taken up, DCI requires a sworn affidavit.
He told the magazine of the common treatment for many children : "Once bound and blindfolded, the child will be led to a waiting military vehicle and in about one-third of cases will be thrown on the metal floor for transfer to an interrogation centre.
"Sometimes the children are kept on the floor face down with the soldiers putting their boots on the back of their necks, and the children are handcuffed, sometimes with plastic handcuffs, which cut into their wrists. Many children arrive at the interrogation centres bruised and battered, sleep-deprived and scared."
Mr Horton said the whole point of this treatment was to get the children to confess as quickly as possible.
In one case, even though a child insisted that a confession he had signed was not true, as he had signed it only after pressure, he was convicted on the basis of the confession.
A spokeswoman for Mr Rudd said that, during Israel’s last appearance before the UN Universal Periodic Review Working Group, Australia questioned Israel about reported mistreatment of detainees.
She said the government universally opposes the detention of minors.
"The Australian government’s long held view is that all children, regardless of ethnicity, religion, gender or other differences, should enjoy the same legal and human rights protections," she said.
The Australian, 17 December, 2011.