"While 100th anniversaries are thought to provide some opportunity for creating a greater sense of unity, it is also recognised as a potential area of divisiveness."
The report said centenary planners did not know what recently arrived Australians thought of the idea, and there was concern about how to involve and include "non-Anglo" groups, especially those who were once enemies.
Since federation Australia has fought nationalities now well-entrenched in its society, including Chinese, Germans, Italians, Koreans, Vietnamese, Indonesians, Iraqis and Afghanis.
But the Returned and Services League has slammed the report, saying Anzac Day maintains a central place in Australian society, that Australians "overwhelmingly" want the centenary - confirmed in the report's findings - and that Turkey and Turkish communities support it.
Turkey has recognised the name Anzac Cove for the site of the Gallipoli landings, and works with Australian and New Zealand officials on ceremonies there. The Kemal Ataturk Memorial in Canberra says: "You the mothers ... wipe away your tears. Your sons are now lying in our bosom and are in peace."
Beyond cultural sensitivities, the report says support for Anzac Day remains strong even among people who staunchly oppose violence and war, with many seeing the origins of national characteristics in the nation's military history.
"It was clear that erring by making commemorations 'overly politically correct' would generate more negative reactions from the general public," it says.
But it adds that younger members of focus groups said an "unpopular conflict" occurring at the time of the centenary could affect attitudes.
"It may be necessary to refine the events or the tone of the commemorations to minimise the risk of rejection from any segments of the community."