NZ and Australia have urged both activists and whalers to calm down
Australia has set a deadline for Japan to stop whaling in the Southern Ocean by November this year, or face international legal action.
Prime Minister Kevin Rudd said he was still hopeful that talks with Japan would lead to a voluntary halt.
Japan's Foreign Minister Katsuya Okada is to visit Australia this weekend.
Despite a 1986 international moratorium on commercial whaling, Japan kills hundreds of whales each year, ostensibly for scientific research.
Mr Rudd told the Channel 7 TV station that Australia would "work with the Japanese to reduce, through negotiation, their current catch to zero".
"If that fails - and I'm saying this very bluntly... - if that fails, then we will initiate that court action before the commencement of the whaling season in November 2010."
Australia has made such threats before but correspondents say the timing and assertive tone of this statement - coming just one day before Mr Okada is due to visit - gives the words added weight.
The BBC's Nick Bryant in Sydney says Mr Rudd has been criticised for backing away from an election promise to take international legal action against Japan for its annual whale hunt in the Southern Ocean.
Mr Rudd is currently slipping in popularity polls and faces an election this year.
"Now, that is a direct honouring of the commitment I gave to the Australian people. And that is the right [way] to handle it with a friend and partner, Japan, which is also a very significant, long-standing economic partner as well," he said.
"That's the bottom line and we're very clear to the Japanese that's what we intend to do."
"Specifically, what we're putting to the Japanese is to take where they are now, which is the slaughter of some hundreds of whales each year and reduce that to zero," Mr Rudd said.
THE LEGALITIES OF WHALING
Objection - A country formally objects to the IWC moratorium, declaring itself exempt. Example: Norway
Scientific - A nation issues unilateral 'scientific permits'; any IWC member can do this. Example: Japan
Aboriginal - IWC grants permits to indigenous groups for subsistence food. Example: Alaskan Inupiat
"If we don't get that as a diplomatic agreement, let me tell you, we'll be going to the International Court of Justice."
Our correspondent notes that international legal action also carries risks. If the prosecution fails, legal experts say it might embolden the Japanese to expand its activities.
Australia and New Zealand have consistently opposed Japan's killing of hundreds of whales each year via a loophole in an international moratorium which allows "lethal research".
Japan's new government has maintained its support for whaling, which has deep cultural significance for the Japanese people, since coming to power in September.
Mr Okada will meet Mr Rudd and Defence Minister John Faulkner after arriving on Saturday before holding talks with Australian foreign minister Stephen Smith on Sunday.
Japan is Australia's top export market with sales worth A$55 bn ($49 bn, £31.7 bn) in the year to last June.
Anti-whaling groups have made a habit of joining the Japanese ships and trying to prevent them from catching whales.
This has led to several violent confrontations, including the ramming of the Sea Shepherd activist group's boat.
The group's leader, Peter Bethune, has been taken to Japan for questioning after he boarded a Japanese whaling ship earlier this week.