The case, in a western Sydney school, has sparked a letter to Christian schools urging prayers for all people harmed in the Gaza war, whether on the Israeli or Palestinian sides.
Since the war broke out on October 7, Islamophobia Register Australia has been flooded with a 13-fold increase in reporting rates, averaging more than 30 reports a week.
The 227 incidents to last Friday include the harassment of worshippers at mosques, Muslim women being spat at and a large amount of verbal abuse.
"But we've heard of a range of incidents that were not reported to us," executive director Sharara Attai told AAP.
"This is in line with research that says Islamophobia is significantly under-reported."
Ms Attai considers the slur against the year-six Christian child an example of Islamophobia due to a likely perception of "Muslimness" in the perpetrator's mind.
She compared it to an uptick in abuse towards the Sikh community immediately after the September 11 attacks in 2001.
The school incident has also added to concern in the Palestinian Christian community that they were being forgotten by some schools.
Parents' disquiet about school prayers for Israel, which failed to mention Palestinians despite some students having Palestinian backgrounds, sparked a letter to Catholic and Anglican schools.
"We kindly encourage your school to consider including prayers for all people including Palestinians in the school's activities and gatherings," the letter by Palestinian Christians in Australia reads.
"Our shared mission is to foster a sense of unity, tolerance and peace, mirroring the values upheld by our faith."
Board member Sally Asfour blamed media and government figures for failing to properly show what Palestinian people were enduring.
"Our children are being subjected to bullying and harassment in Australia as a result," she told AAP.
NSW Labor MP Julia Finn last week highlighted how "despicable" incidents of abuse in Australia were compounding trauma for Palestinian Australians with close ties to Gaza.
That included Sydney relatives of those killed by an Israeli air strike that damaged St Porphyrius Church on October 19.
"These incidents are small in number but are really distressing for communities that are already traumatised," the Granville MP told parliament.
A similar rise in anti-Semitism has been reported among Jewish groups since Hamas fighters massacred 1200 people and took about 240 hostages on October 7.
Subsequent shelling of the densely populated Gaza Strip by Israel has killed almost 15,000 people including about 6000 children.
There are hopes a four-day ceasefire that began on Friday will result in the release of at least 65 Israeli and foreign hostages and 150 Palestinian prisoners.