Australia has held its first funeral for a victim of the Bali nightclub bombing that killed at least 190 people.

About 200 mourners gathered in the Sydney suburb of Sutherland on Wednesday, to say farewell to 29-year-old Jodie O'Shea.

Most victims have not been positively identified

She died in a Perth hospital three days after the 12 October bomb at the Sari nightclub, at Bali's Kuta beach.

A friend who was with her at the nightclub, Michelle Dunlop, is still missing.

Ms O'Shea's bother, Gerard, told mourners they owed it to his sister to solve the terrorism problem peacefully, not through war.

"Mahatma Gandhi said 'be the change that you would want in the world,' he said.

"Peace is not something you can demand of others. You have to do it yourself."

Families wait

Carolyn Saunders, one of Ms O'Shea's friends said: "Grieving lasts for a short time, love lasts forever.

Jodie was our pretty lady and we'll miss her dearly. Goodbye to our sweet friend."

A private cremation was held on Wednesday afternoon. It was the first funeral for one of the 94 Australians believed killed in the blast.

Only four of the Australian victims have been positively identified - one in Bali and three others who died in after being airlifted to Australian hospitals.

The other 90 Australians are missing and presumed dead. Badly charred human remains are still being examined in Bali morgues and it could take weeks or more to positively identify all the victims.

A second funeral is due to be held on Thursday for Perth resident Tracy Thomas, 41, who died from her injuries on Sunday.