A Teal MP has threatened to sue her political rival over a 'disgraceful accusation' that one of her campaign staff covered up a poster of an Israeli family who had been abducted by Hamas, as the Liberal candidate refuses to back down.

The Bibas family were kidnapped during Hamas’ October 7 terrorist attack on Israel in 2023. 

Shiri Bibas, 32, and her two young children Ariel, five, and Kfir, two, were killed while in captivity in Gaza and only the father, Yarden, returned alive.

On Thursday night, Liberal candidate Ro Knox alleged that a poster for Allegra Spender, the MP for Wentworth in Sydney's eastern suburbs, had been placed over a picture of the Bibas family in Rose Bay. 

It came as a poster for Ms Knox had also been defaced with a Hitler moustache and a Swastika scrawled on her forehead in black pen. 

It is understood the police are investigating the alleged hate crime. 

'It is also deeply disappointing and offensive that Allegra Spender’s team chose to cover a poster of the Bibas family with one of her election signs,' Ms Knox said.

'This shows a lack of respect, and our community deserves a campaign built on honesty, integrity, and decency.'

Wentworth, which includes the suburbs of Bondi Beach, Rose Bay, Bellevue Hill and Vaucluse, has one of the largest Jewish populations in Australia.

There have been a number of violent anti-Semitic attacks in the area in recent months, including the attempted firebombing of Jewish leader Alex Ryvchin's former Dover Heights home in mid-January.

But hours after the accusation was levelled, Ms Spender claimed it was false and alleged that her poster had been there first.

'My post was put up previously, clear of anything else,' she said in as statement posted on Instagram. 

'The volunteer who put up the poster is a Jewish Australian. The Bibas family poster was inserted later. There is time-stamped photo evidence and a statutory declaration from the volunteer to confirm this.

'I am considering legal options against the Liberal Party candidate and I ask that she unreservedly apologise.

'I'm disgusted to see the Liberal Party candidate try to exploit the tragedy of the Bibas family for political gain.' 

On Friday morning, Ms Knox refused to back down, vowing that she 'will not be intimidated'.

'There is clear proof that a poster commemorating the Bibas Family was securely fastened to a fence and was later covered by a Teal party poster promoting Allegra Spender,' Ms Knox responded. 

'Ms Spender and her Teal party may not fully appreciate the significance of the Bibas Family but many people in the Wentworth community do.'

She added: 'The Bibas Family commemoration poster is a modest and dignified way to remember the Bibas children and their mother.

'I am very disappointed that Ms Spender would threaten heavy handed legal action with such inflammatory language about something I said, rather than apologise for something her team did.'

Ms Knox called on the incumbent MP to 'do the right thing and apologise to the community'.

On Thursday, the Liberal candidate said that the defacement of her posters was 'deeply disturbing and has no place in Wentworth or anywhere in Australia'. 

'This kind of hate and vandalism is completely unacceptable, and I call on all candidates and parties to stand against it,' she added.

'We have reported this incident to the police.'

Daily Mail Australia approached NSW Police for comment.