Before a meeting on Tuesday night with President Susilo Bambang Yudhoyono, Mr Abbott said Australia and Indonesia shared many common interests, including tackling people smuggling and combating the growing risk of jihadists returning to the region from Syria.

''I think it is important that we have an intelligence-sharing memorandum of understanding between Australia and Indonesia because we have a lot of shared intelligence and security interests,'' he said.

Those were not limited to combating people smuggling, he said, but also included ''the risk of people coming back from Syria who have been radicalised and militarised''.

Last month, Mr Abbott cancelled a meeting with President Yudhoyono at the last moment to avoid any embarrassment because of an ''on water'' people-smuggling operation.

The meeting is designed to begin repairing the diplomatic relationship after controversies over Australia's hardline asylum seeker policies and the leaking of classified documents that showed Australia spied on the Indonesian leader.

Ahead of the meeting, Mr Abbott also said Australia strongly ''discourages'' unilateral actions in the South China and East China seas and urged no change to the status quo in the region in a clear signal to China over its recent territorial claims.

Tensions in the region have escalated and Indonesian armed forces chief General Moeldoko recently expressed dismay in a Wall Street Journal article at China's inclusion of parts of the Natuna Islands in its so-called ''nine-dash line'' claim to 90 per cent of the South China Sea.

Of the Natuna Islands claim, Mr Abbott said Australia believed there should not be any disturbance to the status quo other than by due process of international law. ''There's a lot that we can discuss on the South China Sea and the East China Sea,'' he said. ''The Australia government has long had a consistent position. We discourage unilateral actions, we very strongly discourage and we disapprove of unilateral actions.''

''We think that no country should seek to be provocative in what is a contested part of the world. We think that territorial claims should be resolved peacefully and in accordance with international law.''