Australia and the United States signed a landmark agreement paving the way for closer cooperation in the surveillance of space, tracking satellites and space junk.

"Australia and the United States shared a deep concern about the increasingly interdependent, congested and contested nature of outer space," the two sides said in a statement after annual security talks.

Both countries, the statement added, "acknowledged that preventing behaviors that could result in mishaps, misperceptions or mistrust was a high priority."

The U.S. military has been increasingly relying on satellites for navigation, targeting, secure communications and intelligence gathering. Experts have long expressed fears of potential for collisions, as well as China's investments in space defense technology.

U.S. Defense Secretary Robert Gates said Australia and the United States were working "hand-in-hand" to forge new cooperation in new domains, including space and cyberspace.

"The Space Situational Awareness Partnership statement of principles signed today, for example, will lead to great cooperation between our militaries in the areas of intelligence, surveillance and reconnaissance," Gates said Monday.

Relevant negotiations were expected to be in January, he explained. It is anticipated that the talks will center on the inclusion of ground-based radar sensors in Australia to the U.S. military's space surveillance network.

The network's purpose includes monitoring satellite traffic for possible collisions and seeking to prevent damage to vital defense-related satellites.

"The growing number of countries and companies placing satellites in space is also adding to the congestion, particularly in certain orbits," the joint statement said.

The space surveillance accord comes amid growing U.S. concerns that China has been militarizing space. The Pentagon has reported that it believes Beijing has expanded its defense interest to space weaponry.

Three years ago China drew sharp criticism from the United States for launching a ballistic missile that took out an old weather satellite. The incident sparked international condemnation for adding more space junk, about 6,000 pieces of debris, in orbit.

Gates was in Melbourne attending annual defense and security talks with Australian officials. He said the two nations were looking to set up a bilateral group focused on developing options for "enhanced joint defense cooperation on Australian soil."

Reports expanded training opportunities were billed premature, though no final decision had been made.

Gates was joined in the talks by U.S. Secretary of State Hillary Clinton and Australian Foreign Minister Kevin Rudd who said his alliance with the United States had "never been more important."

"We stand ready to confront the challenges of this new century," he said.