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A pall was cast over Australia-United Kingdom diplomatic talks in Perth this morning as the British delegation braced for the confirmation of further deaths from a bloody hostage crisis in Algeria overnight.

British Foreign Secretary William Hague abandoned a planned flight to Sydney and was preparing to leave directly from Perth to help deal with the Islamist attack which, at the time of today’s talks, had claimed one British life.

“We are prepared for worse news,” he told Foreign Minister Bob Carr, Defence Minister Stephen Smith and dignitaries at the State Reception Centre in Kings Park this morning.

After laying a wreath at the State War Memorial, the counterparts signed a defence and security cooperation treaty formalising the allies’ existing protocols and memoranda of understanding into a “broad strategic framework’.

“If the treaty becomes known as the Perth Treaty, well, that’s something I won’t object to,” Mr Smith, the federal member for Perth, said.

Continuing the agenda of fiscal restraint set by the Cameron Government after its election in May 2010, British Defence Minister Philip Hammond said today’s AUKMIN talks should review defence priorities.

“Looking at how we manage our fleets of vehicles, aircraft, ships, how we procure the equipment that we need in a way that maximises the leverage of our taxpayers’ dollars and pounds to get the best possible defence outcome we can for the budgets we have available is something that we should be doing and in this tight fiscal environment,” he said.

But it was clear the Algerian incident, described by London newspaper The Guardian as the worst international hostage crisis in recent years, would provide a grim undercurrent to the Perth talks.

“May I extend our condolences to our British friends on the apparent loss of a life in Algeria and wish you well in negotiating a satisfactory outcome in this very disturbing situation.,” Mr Carr said.

“We acknowledge that it is very high on your minds this morning.”

Mr Hague conveyed his country’s happiness over the two-year appointment of Australia to the United Nations security council, saying it coincided with a “turbulent period in world affairs”.

“We will be stronger if we face those together as we have done so often in our history,” he said.

“I’m very grateful for the understanding and concern of our hosts about the situation we have been dealing with in Algeria over the last 48 hours or so, which indeed tragically has involved the loss of one British life.

“It will mean that I am going home a little earlier than intended.”