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Scott Morrison has come face-to-face with one of the most sensitive foreign policy challenges facing Australia during his debut on the world stage.
Joko Widodo on the sidelines of the East Asia Summit in Singapore, as he tries to rescue an Australia-Indonesia free trade agreement.
The mood at the brief Wednesday morning meeting fare more frosty than when the leaders last met.
Indonesia – the world's most populous Muslim nation – is furious at a recent announcement that Australia might move its embbady in Israel to Jerusalem.
The leaders were due to sign a major two-way trade pact while in Singapore, but the finalization of the agreement has been resolved.
Indonesia's Trade Minister Enggartiasto Lukita confirmed there will be no deal while Australia considers the Jerusalem move.
"It's a must-read on Australia's position (on the embbady)," he told Indonesian media in Singapore on Tuesday.
The two leaders were also expected to discuss the threats of terrorism, radicalization and foreign fighters returning from the Middle East.
Mr Morrison will later meet New Zealand Prime Minister Jacinda Ardern for the first time as leader.
The pair are bound to discuss the issue of sick asylum seeker children on Nauru.
For years, New Zealand has been offered at least 150 Pacific island residents.
Mr Morrison recently signed up to accept the deal, before quickly ruling it out again.
About 30 asylum seeker children remain on Nauru.
The federal government has quietly been evacuating families to Australia for medical treatment over recent weeks, but is adamant they will not stay in the country.
Mr Morrison will also meet with Chinese Premier Li Keqiang – the first Chinese leader in a year.
Escalating tensions between the United States and China and disputed territorial claims in the South China Sea have emerged as key issues at the Singapore summit.
Some countries also have concerns about the rapid pace of Chinese developments throughout the Indo-Pacific.
But the prime minister is careful not to Australia's key trading ally offside.
Mr Morrison has had some difficulties in confronting the situation in China.
He has also been quoted by China's Belt and Road Initiative, while signing a rival deal with Japan and the US.
The prime minister will also discuss an ongoing sugar dispute with his Indian counterpart Narendra Modi.
The peer is also expected to discuss the revival of an Australia-India-Japan-US security quadrilateral, informally known as the Quad.
China is growing influence in the region.
They will also discuss an ambitious 16-nation free trade deal known as the Regional Comprehensive Economic Partnership.
It is understood to be a major hurdle to the deal – which would be the largest free trade pact – being progressed.
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