His comment in a televised interview Sunday drew condemnation by the governments of the Philippines, Malaysia, Indonesia and Thailand, which warned military action in their countries by Australia would breach their national sovereignty.
Opposition politicians also attacked Howard, urging him to withdraw the statement and accusing him of a major diplomatic gaffe certain to worsen Australias difficult relations with its neighbors.
Despite the criticism, Howard stood by his remarks that pre-emptive action might be warranted if there was no other option to stop terrorist attacks on Australian soil.
"Any Australian prime minister unwilling to do that would be failing the most basic test of office," he told federal parliament in Canberra.
But he said his comments related only to the determination of his government to protect Australia, adding: "Nothing that I said yesterday was in any way directed against the countries of our region."
Howard said Sunday the most likely threat to a nations security was from non-state terrorist groups, and international law could no longer cope with the changed circumstances confronting the world.
"It stands to reason that if you believe that somebody was going to launch an attack on your country, either of a conventional kind or a terrorist kind, and you had a capacity to stop it and there was no alternative other than to use that capacity, then of course you would have to use it," he told the Nine Network.
Experts say Australia does possess the military capacity to launch a pre-emptive strike on a terrorist base in the region, while holding serious reservations about the political wisdom of making such a threat.
Indonesias foreign ministry said Australia did not have the right to launch attacks in other countries and warned that countries could not "flout international law and norms willy-nilly."
The Thai government said no country should do anything like Howard suggested. Each country had its own sovereignty that must be protected, a government spokesman told the radio.
The Philippines National Security Adviser Roilo Golez said Howards comments were completely unacceptable and "bordering on shocking.
"I cant believe that it would come from a supposed friendly country in the neighborhood. You are talking about a region with very strong government, the ASEAN (the Association of Southeast Asian Nations) region.
"This is the 21st century, not the 19th century," Golez added.
Malaysias Defense Minister Najib Razak said Kuala Lumpur would not allow foreign intervention in its fight against terrorism.
"We are not going to give any approval to any country to launch any form of counter-terrorism activities in Malaysia. Thats very clear," Najib told the official Bernama news agency.
Australias opposition foreign affairs spokesman, Kevin Rudd, said Howard was using language designed to make him look "hairy-chested" to a domestic audience.
"As it is being read, it is seen as Australia under John Howard is contemplating a possibility of an attack on our neighbours in Southeast Asia," he said.
Greens Sen. Bob Brown urged Howard to retract his comment, saying: "This is a major gaffe by a prime minister who has been caught out by jingoism."
Howards comments were the latest in a series of statements or decisions which have upset Southeast Asian nations, already angry over the cost to their economies of warnings by Australia against travel to their countries.
Some were offended by raids on the homes of Muslims in Australia as part of Canberras anti-terrorist crackdown in the aftermath of the October 12 Bali bombing in which around 190 people died, half of them Australian.