ASEAN Summit: Malaysia cautions Australia over Israel embassy move

Malaysia’s PM has warned Australia it risks “adding to the cause for terrorism” if it relocates its Israel embassy from Tel Aviv to Jerusalem.

Malaysia's Prime Minister Mahathir Mohamad (L), Myanmar State Counsellor Aung San Suu Kyi and Philippine President Rodrigo Duterte pose for a group photo. Picture: AFP

Malaysian Prime Minister Mahathir Mohamad has warned Australia it risks “adding to the cause for terrorism” if it relocates its Israel embassy from Tel Aviv to Jerusalem raising the prospect of more diplomatic trouble over the controversial issue.

Scott Morrison met the veteran Malaysian politician for the first time this afternoon on the sidelines of the ASEAN summit in Singapore.

After the meeting Mr Mahathir told reporters that he had raised the issue with Mr Morrison.

“I pointed out that in dealing with terrorism one has to know the causes,” he said.

“Adding to the cause for terrorism is not going to be helpful. I pointed that out. Australia has not made any decision. They’re looking into it.”

Mr Morrison has battled criticism over his review of the Israeli embassy location this week, including from Labor leader Bill Shorten who accused him of making Australia “look stupid” by floating the idea.

The relocation, first mooted ahead of the Wentworth by-election last month, has strained relations with Indonesia and left the two nation’s already-concluded free trade agreement hanging in the balance.

Jakarta is one of the Palestinian state’s strongest supporters and the US decision to move its Israel embassy to Jerusalem earlier this year sparked angry, mass demonstrations outside its own Indonesian mission.

The prime minister has worked hard to talk down the difficulties it has caused with Jakarta _ which has warned any relocation would harm the bilateral relationship _ saying Indonesian president Joko Widodo did not conflate the issues of the Israel embassy and trade deal during their meeting Wednesday morning.

But Indonesia’s trade minister Enggartiasto Lukita also made it clear this week the issue had derailed the signing of the Indonesia Australia Comprehensive Economic Partnership Agreement and that the deal was unlikely to be signed without an assurance the Australian embassy would remain in Tel Aviv.

Mr Morrison hit back today at Mr Shorten, accusing the Labor leader of being “quick to take cues on Australia’s foreign policy from those outside Australia”.

“Bill Shorten doesn’t want to consider this question at all,” he said.

“I’ve put in place a process to do it properly and to ensure the position we ultimately arrived at is one consistent with Australian interests and not related to other matters, because Australia has to be sovereign in determining its foreign policy. We can’t have it determined by any other nation.”

While the embassy issue has cast a cloud over Mr Morrison’s first multilateral summit, there have been notable wins including the conclusion of a free-trade agreement with Hong Kong and a conciliatory first meeting with Chinese Premier Li Keqiang late Wednesday.

Mr Li described the Australia China relationship as being at a “turning point after our ups and downs” and called for both sides to approach the relationship “with a view of mutual benefit”.

Mr Morrison said the meeting had been positive and that he had reassured the Chinese premier that Australia’s Pacific pivot plans _ including a $A2 billion infrastructure fund and increased naval deployments to the Pacific _ “were not exclusive”.

He will meet Chinese president Xi Jinping at the weekend APEC summit in Papua New Guinea, where tensions between Washington and Beijing are likely to be high after US vice president Mike Pence told the Singapore summit that “empire and aggression have no place in the Indo Pacific”.

The comments by Mr Pence, who flew out of Singapore today for APEC, appeared aimed squarely at Beijing’s growing presence in the region and its determination to dominate the South China Sea.

But Mr Morrison _ who spent the morning paying respects to more than a thousand Australian servicemen and women buried at Singapore’s Kranji War Cemetery _denied the escalating feud between China and the US created a difficult balancing act for Australia.

“Our relationships with each of these major partners are different, and they’re both successful. Australia doesn’t have to choose and we won’t choose,” he said.