Malcolm Turnbull says the shooting down of a Russian warplane by Turkey on the Syrian border is of great concern, but restraint should be shown as it is investigated.
The Turkish army said the Russian Su24 fighter was shot down by two of its F-16s after it violated Turkish airspace 10 times within a five-minute period.
But Moscow, quoting what it said were preliminary reports, said one of two pilots who ejected from the Su24 plane was killed by gunfire from the ground as he descended on Tuesday.
And a Russian soldier was killed when a helicopter search-and-rescue operation came under fire, it said.
Mr Turnbull said the incident was a matter of "great concern".
"We call on all parties to exercise restraint in respect of this incident," the prime minister told reporters in Canberra on Wednesday.
US President Barack Obama said Turkey had a right to defend its territory and air space, but joined with NATO officials to call for calm.
A US military spokesman in Baghdad confirmed 10 warnings had been issued, but said it was not clear on which side of the border the jet had been flying, and it would take some time to analyse data before knowing for sure.
Mr Turnbull said a memorandum of understanding existed between the coalition, of which Australia is a part, and the Russians in terms of air operations in Syria.
"We are paying very close attention to that and of course the safety of our personnel," he said.
Opposition Leader Bill Shorten said it underlined the need for international talks to find a political solution.
"This highlights the complexity of the mission Australia is undertaking and highlights the need for us to hasten slowly," he told reporters.
Opposition foreign affairs spokeswoman Tanya Plibersek said better communication was needed between militaries.
Crossbench senator Jacqui Lambie believes the incident is a game-changer and is worried the situation will worsen.
"I do not see President Putin sitting back and taking this - I believe it is going to get very nasty in the next 48 hours," she told reporters.
Russia's defence ministry and NATO are investigating the incident.