US Secretary of State Hillary Clinton has kicked off bilateral talks in Perth saying co-operation with Australia is likely to deepen now Australia holds a seat on the UN Security Council.
In opening remarks at the Australia-United States Ministerial (AUSMIN) consultations, Ms Clinton congratulated Australia on winning the seat.
"That achievement opens the door to even closer co-operation between us and lends an additional dimension to our AUSMIN agenda," she said.
Ms Clinton said that would cover issues where Australia's voice would be even more important, including Iran, Syria and Afghanistan.
She said after great sacrifice, the Afghanistan operation was on track to hand security responsibility to the Afghan government in 2014 and bring the combat missions to a close.
"That will not mark the end of our commitment to the people of Afghanistan because we will be discussing ways in the next months that the US and Australia will work closely with international partners to support Afghanistan's continued progress so it never again becomes a staging ground for international terrorism," she said.
Defence minister Stephen Smith said Perth was Australia's Indian Ocean capital and was becoming more important both economically, with substantial US investment in resources, and strategically, with the navy base HMAS Stirling likely to see much greater use.
He said the first deployment of US Marines to train in Australia under an enhanced co-operation program had proven very successful.
"We look forward today to discussion about the potential for enhanced aviation access to our Northern Territory RAAF bases and also in due course to enhanced access to HMAS Stirling," he said.
Mr Panetta said the US had no stronger ally in this region.
He said he had visited the Special Air Service regiment barracks in Perth, expressing America's appreciation for the soldiers' sacrifices, particularly in Afghanistan.
"As we face budget constrictions in both of our countries, we still confront threats in the world, threats that are real," he said.
"We still have to fight a war in Afghanistan and complete that mission. We still have to deal with terrorism. We still have to confront the threat from North Korea in this region."
Mr Panetta said the biggest challenge now for the US was to work with allies such as Australia as it rebalanced its force posture in the Asia-Pacific.
Before the conference started, Ms Clinton and Mr Panetta joined Mr Smith and Senator Carr for a brief wreath-laying ceremony at Perth's War Memorial.
With the tight security surrounding the meeting, the recitation of the Ode - "They shall grow not old as we that are left grow old ....." competed with the noise of a circling police helicopter.
Perth has feted the US visitors, with Lord Mayor Lisa Scaffidi presenting Ms Clinton with a key to the city.
"United States investment in Western Australia is the most significant outside the US itself. We are so truly proud of the great relationship we have with the USA," the mayor said in a statement.