The prime minister has played down concerns his comments about moving Australia's Israeli embassy to Jerusalem could affect trade relations with Indonesia.
Scott Morrison and Trade Minister Simon Birmingham have been in contact with their Indonesian counterparts since the major Middle East policy shift was floated on Tuesday morning.
"At every reasonable level our government has continued our engagement with Indonesia as you would expect," Senator Birmingham told reporters in Canberra on Wednesday.
"Indonesia has made clear on the public record that our agreement with them is on track for finalisation this year.
"That's what we're working towards, that's what they're working towards, and we continue to undertake that work."
Mr Morrison believes Australia can take a stance on such sensitive global political issues because it has good relationships with neighbouring nations.
Indonesia has warned Australia that moving its embassy to Jerusalem could undermine the peace process with Palestine.
But the world's largest Muslim country, which is a strong supporter of Palestine, has denied reports it's considering suspending a soon-to-be-signed trade deal with Australia.
Mr Morrison floated the idea of moving the embassy on Tuesday, days out from a by-election in one of Australia's most Jewish electorates.
Indonesia's foreign minister has warned against the idea.
"Indonesia encourages Australia and other nations to continue to support the peace process and not conduct any action that could undermine the peace process and global security," Retno Marsudi told reporters on Tuesday.
Mr Morrison said he was in contact with President Joko Widodo on Tuesday and had explained Australia's reasoning.
"I think people respect that countries will take positions on things from time to time," he said.
"What both Indonesia and Australia are committed to is a two-state solution when it comes to the Middle East."
Asked whether cabinet had approved the decisions, Foreign Minister Marise Payne told parliament it had been "discussed at the appropriate levels of the government".
The minister also talked down claims a final policy decision had been made.
"The prime minister has indicated that he wants to look at the matters," she said.
Mr Morrison earlier told parliament he looked forward to going to the ASEAN, APEC and G20 summits in coming months and talking about his ideas of doing things differently in the Middle East.
The free-trade deal with Indonesia is set to unlock education opportunities in the Asian country, which has a workforce of more than 130 million people but half of them only have a primary school education.
Australia, the US and Israel were the only three countries to formally vote against Palestine heading a group of 77 developing nations at the UN.
Australian Associated Press
