US Secretary of State Hillary Clinton's talks with the Gillard government have begun in Perth but threaten to be overshadowed by the spiralling sex scandal involving top American military officials.
Mrs Clinton is in the annual AUSMIN talks at Perth's State Reception Centre with Defence Minister Stephen Smith, Foreign Minister Bob Carr and US Defence Secretary Leon Panetta.
They will discuss Australia's deepening future involvement in the US strategic "pivot" to Asia, Afghanistan post 2014, cyber warfare and the security of maritime trade routes to Australia's north, among other issues.
But Mr Panetta is also grappling with the growing sex scandal engulfing some of his top security officials, which has already claimed the scalp of CIA director David Petraeus and is now entangling General John Allen, who as ISAF commander heads all coalition forces in Afghanistan.
Mr Panetta is expected to be peppered with questions when he faces a press conference this afternoon after the AUSMIN talks.
At her opening remarks before the AUSMIN meeting, Mrs Clinton outlined the closer security co-operation she hoped Australia and the US would build in coming years.
"All of our work together, whether it's on the world stage or here in the Asia Pacific or the Indo-Pacific, is driven by the values and the vision we share," she said.
"We recognise that stability and security increasingly depend on balanced and vibrant economies. We're also committed to working hand in hand with Australia to build a more mature and effective multilateral architecture for the region that can help settle disputes peacefully, promote universal rights (and) greater trade and commerce within an economic system that is open, free, transparent and fair."
She added: "We also are eager to implement in a continuing fashion the agreements reached by President Obama and Prime Minister Gillard last November which will help the United States move to a more effectively distributed, operationally resilient and politically sustainable force posture in the region."
Before the talks, Mrs Clinton and Mr Panetta, joined by Senator Carr and Mr Smith, attended a wreath-laying at the World War One memorial to fallen Australian soldiers in Perth's Kings Park.
She is being escorted around Perth by a tight security detail including WA and Australian Federal Police, as well as the US State Department's Bureau of Diplomatic Security.
Mrs Clinton also congratulated Australia on its election to the UN Security Council, saying this meant its voice would be "essential" on global tensions such as Iran, "where the international community remains firm and united in our efforts to prevent Tehran acquiring nuclear weapons", and Syria, "where we need to stand together now to increase pressure on the Assad regime and expand humanitarian assistance to people in need."
Mrs Clinton flagged detailed discussions on the kind of military presence the US and Australia would keep in Afghanistan after the main forces are withdrawn in 2014. It is expected that both countries will maintain a training role and possibly keep a small number of special forces to target Taliban leaders.
Mr Panetta acknowledged that budget cuts both in Australia and the US made the challenge of confronting security threats around the world an even greater one.
"As we face budget constrictions in both of our countries, we still confront threats in the world, threats that are real," he said.
Mr Panetta declined to answer an American reporter's question on Generals Petraeus and Allen, saying there would be time for that later.
General Petraeus has resigned after revealing he had an affair with his biographer Paula Broadwell. But the investigation has also reportedly revealed that General Allen, the top commander in Afghanistan, sent 30,000 emails to a married woman, Jill Kelley, who is a friend of the Petraeus family.