Nowhere "is the need for innovation more critical than in cyber, which continues to be a pervasive threat to our militaries and to our businesses," Australian Defence Minister Marise Payne said at a US-Australian summit in California.

US Defense Secretary Jim Mattis said the two countries had signed a memorandum of understanding "to deepen cybersecurity cooperation."

The move comes amid ongoing hacking thefts of sensitive information from military networks, and Russia's continued attempts to subvert democracy in America and elsewhere.

On a separate topic, an Australian reporter asked Mattis whether he thought the Australian navy should conduct a so-called "freedom of navigation" operation to challenge Chinese claims of sovereignty on militarized islets in the South China Sea.

The longstanding issue poses a dilemma for Canberra, with Australian lawmakers debating how much the country should align itself with its longstanding ally America, or pay more heed to the desires of China, its biggest trade partner.

"As far as freedom of navigation decisions by Australia, that's a sovereign decision by a sovereign state," Mattis said.

"We'll just leave that decision with the people of Australia, which is exactly where it belongs."

US Secretary of State Mike Pompeo and his Australian counterpart Julie Bishop also attended the annual summit.

Pompeo was asked about US views of holding Russia to account over its role in the 2014 shootdown of Malaysia Airlines flight MH-17 over Ukraine, when 298 people, including 38 Australian citizens and residents, were killed.

"We need the Russians to continue to be held accountable for that," Pompeo said.

"We take this matter seriously and we committed over these last two days, as we have for the last months, to continue to support every effort through the Joint Investigative Team to hold the perpetrators for this heinous activity accountable."