Tony Abbott has indicated he will resist any move to exclude Vladimir Putin from the G20 meeting in Brisbane later this year, complicating potential moves by the United States to further isolate Russia.
At the behest of the US, Russia was kicked out of the G8 because of its annexation of Crimea from Ukraine.
Instead, President Barack Obama met counterparts Canada, Japan, Britain, France, Germany and Italy in Brussels this week as the G7.
Mr Obama's Cold War-style feud with Russian President Vladimir Putin over Ukraine is overshadowing today's 70th anniversary of the D-Day landings that will see 19 world leaders gather on the beaches of Normandy.
The US has warned that Russia may face sanctions if it does not stop interfering in Ukraine's sovereignty and the G7 leaders jointly demanded Russia recognise Ukraine's May 25 presidential election, withdraw troops bordering Ukraine and cease military aid.
With much of Europe reliant on Russia for its energy security, the stand-off is creating considerable unease, with pressure increasing for a diplomatic solution.
Speaking in Paris last night, the Prime Minister said he believed Russia's continued involvement in the G20 was important.
"The G20 is an economic meeting whereas the G7 or G8 has tended to have a very strong security component," Mr Abbott said.
"Obviously there are very grave concerns about the behaviour of Russia in Ukraine and I can understand why the G7 leaders were reluctant to sit down with President Putin at this time.
"But when it comes to the prosperity of the world, when it comes to the management of international finances, when it comes to harmonisation of taxation rules, when it comes to trying to promote global growth I think it is best if we can include Russia.
"So at this point in time I'm expecting Russia to be well and truly part of the G20 in November."
Mr Abbott and the two feuding presidents will be among 19 world leaders to attend a D-Day commemoration event on Sword Beach, one of the five landing spots for the 1944 Normandy landings.
The Prime Minister was yesterday one of 60 guests at a British Embassy garden tea party in honour of the Queen who is also in France for the D-Day commemorations.
Mr Abbott said the tea party was to mark the Queen's birthday.
"She's a remarkable woman, a sign of the continuity and stability in our national life and a sign of the continuity and stability the United Kingdom has brought to the world," the PM said.