Rabbi Eli Schlanger's father-in-law told mourners at a packed funeral service that Jewish people will not be defeated by 'those animals who look like humans'.

The father-of-five, 41, died shielding his family when two men opened fire on hundreds of Jewish Australians as they celebrated the first day of Hanukkah at Bondi Beach just after 6.40pm on Sunday.

He was one of the 16 people killed, including one of the gunmen.

Rabbi Schlanger's wife, Chaya, was grazed by a bullet and released from hospital on Monday.

Their two-month-old baby remains at the Sydney Children's Hospital in Randwick, after being struck in the leg by shrapnel during the terror attack.

Before the service on Wednesday morning, police cordoned off Wellington Street, lining the route as mourners filled the packed Chabad synagogue in Bondi, with many forced to wait outside.

Chief Rabbi Yehoram Ulman, Rabbi Schlanger's father-in-law, was overcome with grief and sobbed uncontrollably as his casket was lifted from the hearse.

Mourners were seen embracing outside - one had an Australian flag around her shoulders, while another broke down in tears and blamed Prime Minister Anthony Albanese and Foreign Minister Penny Wong for the massacre.

'What is needed is education, it's not about stopping a bullet, I just feel so frustrated and so does everyone,' Rabbi Ulman said, choking on his words as he fought back tears.

The service began with a rabbi saying: 'We are crying in unbearable pain... in the wake of the horrific terrorist attack perpetrated in our city... we mourn the loss of every precious life.'

He pledged to continue celebrating Hanukkah at Bondi Beach, which has been a regular event for 31 years, with Rabbi Schlanger involved for the last 18 years.

'Eli was ripped away from us in the midst of doing what he did best - spreading love and joy, caring for his people with needless self-sacrifice. 

'In life and death, he towered above as one of the holiest souls. This is a massive loss for the entire Jewish nation. For us, the loss is unspeakable.'

He said every soul who knew Rabbi Schlanger touched would be 'forever grateful' to have known him.

He told the rabbi's five children that their father would always be with them.

Prayers were read from the Torah by different Jewish leaders.

Rabbi Ulman gave a heartbreaking eulogy to the packed synagogue, becoming overwhelmed with emotion at several times throughout.

He said: 'When those animals who look like humans try to destroy us, they try to make us dormant.

'They want us to never go to Bondi Beach again because this is what's happened, but that's not the answer.

'Eli lived and breathed this idea - we can never allow them to not only not succeed, but every time they try something, we become greater and stronger.'

As Rabbi Ulman struggled to choke back tears, loved ones could be heard sobbing with him, with one mourner reaching out to hand a tissue to him as he bravely continued on.

'What I say today will be such an understatement of what you meant to everybody. You became a son to us as much as she's our daughter, you became everything to me - my hands, my feet.'

Rabbi Ulman said Rabbi Schlanger never wanted to be in the limelight.

'Any time he went to visit Chief Rabbis of Israel, he refused to be in any photos, they all loved him in his own right. Everyone just fell in love with him.

'Eli was the best husband, the best father, the best son,' Rabbi Ulman said.

'Our community suffered our own 7th of October, proportionately that's what it is,' he added, referring to a deadly Hamas attack at an Israeli festival in 2023.

Rabbi Ulman said he wished he had told Rabbi Schlanger how much he loved him, and how much he meant to him.

'It should've been said more. And to all of us I'm saying: "Don't leave things for tomorrow, you've got something to say to those close to you, say it today".'

He added his wife saw his son-in-law as her best friend, and prompted a laugh from the grief-stricken crowd when he added 'second to me of course'.

Rabbi Ulman spoke of Rabbi Schlanger's selflessness, describing how he would drive three to four hours each way to speak with prisoners.

'I promise every day of your life, special milestones, he will be with you, even more than all of us physically present,' he said.

He continued: 'It is unthinkable that we talk about you in past tense. 

'Everything we did together. We are told it's forbidden to bring a coffin into a synagogue and to hold a funeral in a synagogue.

'One exception is a great leader among the Jewish people, and a holy martyr who gave his life.

'Eli, Eli, I never thought that it's going to happen, but the second part I always knew, I knew that there's nobody greater than you.'

After the service, eight prison officers marched as the coffin carrying the rabbi was driven away. 

A large congregation of mourners walked slowly behind the hearse; many wiped away tears, their faces marked by shock and disbelief.

Before Rabbi Schlanger was laid to rest, a crowd of mourners paid a final tribute to him.

In a haunting Hebrew song, mourners stood arm-in-arm as they surrounded the hearse, each person singing softly to farewell their friend and leader.

On Tuesday, a close friend of Rabbi Schlanger's wife told Sky News their eight-week-old boy is 'not out of the woods'.

'The sheer horror and evil for somebody to shoot at babies, at women, at old people, it's horrific,' friend Sorella said.

'Chaya was hiding, trying to protect herself and, more importantly, her two-month-old baby. She does not recall getting hit because of the adrenaline, but suddenly somebody next to her said, "You've got blood on your back".

'At the same time as Chaya was hit by a bullet, she was also trying to keep her husband alive and begging the local nurse and surfer to keep doing CPR.'

Rabbi Schlanger was originally from the UK, but led the Chabad mission in Bondi for nearly two decades.

He was a key organiser of the Chanukah by the Sea event targeted by the gunmen.

His cousin, Rabbi Zalman Lewis, on Monday described the moment he received news of the massacre.

He told the British Jewish News: 'I left shul this morning and saw messages from my wife and sister on the family WhatsApp group. 

'They recognised one of the names people were being asked to pray for. It quickly became clear what had happened.'

Rabbi Lewis said his family was only just coming to terms with the sudden loss.

'We are just beginning to process this,' he said. 

'It makes no sense at all. How can a joyful rabbi who went to a beach to spread happiness and light, to make the world a better place, have his life ended in this way?

'Eli loved helping people, encouraging people to do mitzvot (good deeds). He was so bubbly, almost eccentrically so.' 

Following the attack on Sunday, the alleged gunmen were quickly identified as father Sajid Akram, 50, and his son, Naveed Akram, 24. 

Sajid was shot dead by police, while Naveed is recovering from bullet wounds in hospital.

He is under police guard and is likely to face criminal charges on Wednesday.