The Prime Minister, John Howard, says he hopes diplomacy will resolve the standoff over Iran's nuclear program.
Iran is facing the possibility of sanctions imposed by the United Nations Security Council unless it opens its program to international inspections.
In Washington, Mr Howard has held talks with the United States Secretary of State, Condoleezza Rice, on concerns that, despite its denials, Iran is attempting to acquire nuclear weapons.
Mr Howard says the matter must be pursued through diplomatic channels.
"Here is an opportunity for the United Nations to work.
"This is a test of the United Nations, a test of the Security Council.
"It will be interesting to see whether the United Nations, and particularly the Security Council, can rise to the occasion, and I think we should pursue the diplomatic option."