Barack Obama says Australia will have to step up its defence engagement overseas to help the United States maintain international order.
The US President made the comments in a joint press conference with Prime Minister Tony Abbott in the White House, amid concerns that Iraq was teetering on civil war.
The two leaders yesterday concluded an agreement that will see even greater defence cooperation between the US and Australia.
The force posture agreement sets out the legal framework to allow sustained and greater US presence in Australia, above and beyond the rotation of troops in Darwin.
The agreement will also see increased and more coordinated intelligence sharing between the two nations, both of whom are part of the "five eyes" security network.
The two leaders spoke about economic, trade and security issues, with Syria and the emerging crisis in Iraq hot topics.
Radical militants from the Islamic State of Iraq and Levant have been moving towards the Iraqi capital Baghdad and the US is believed to be considering using air strikes to help Iraqi forces repel the insurgents.
ISIL is a breakaway from the al Qaeda terrorist network and aims to create an Islamic territory that includes Iraq and Syria.
Mr Obama did not rule out the US directing some of its military might in the short-term to deal with the "emergency situation" in Iraq.
But the President said the Sunni and Shia leaders in Iraq had to find a political solution to the country's unrest.
"Frankly, over the last several years, we have not seen the kind of trust and cooperation develop between moderate Sunni and Shia leaders inside of Iraq, and that accounts in part for some of the weakness of the state, and that then carries over into their military capacity," Mr Obama said.
The President said the world had become a place where "asymmetric threats" and terrorist organisations were more of a threat than any particular nation.
In this circumstance, it was important for the US and its allies help build the capacity of countries who are currently less able to repel these threats threats.
"There are a handful of countries in the world that we always know we can count on, not just because they share our values, but we know we can count on them because they’ve got real capacity," Mr Obama said.
"Australia is one of those countries. We share foundational values about liberal democracies and human rights, and a world view that’s governed by international law and norms.
"And Aussies know how to fight, and I like having them in a foxhole if we’re in trouble. So I can’t think of a better partner."
Mr Abbott said Australia would do its part to secure the freedom and the safety of the world and its citizens.
"I want to assure the President that Australia will be an utterly dependable ally of the United States," he said.
"The United States has had to bear many burdens, many burdens. The United States has paid a very high price to secure freedom and prosperity for many countries, not just itself. And the United States should never have to do all that work on its own."
The two leaders met for for more than an hour before their joint press appearance in the Oval Office.
Vice-President Joe Biden, Treasury Secretary Jack Lew, White House National Security Adviser Susan Rice and US Trade Representative Michael Froman were present in the meeting.