The Turnbull government is pinning hopes for its US refugee deal on a potential loophole buried deep within Donald Trump’s controversial anti-Muslim executive order. The US president’s latest executive order has closed the nation’s borders to refugees, suspending entry for 120 days and targeting Syrians with an indefinite ban. Declaring the measures were aimed at keeping “radical Islamic terrorists” out of the US, Trump also suspended all immigration from seven predominantly Muslim nations and established a religious test that will give Christians in Muslim countries visa priority. It had been feared the new policy would scuttle the refugee deal the government struck with the Obama administration, which is aimed at resettling hundred of refugees – most of them from the countries banned by Trump – from Manus Island in Papua New Guinea and Nauru. But the government is taking hope from a section of the US order that appears to provide a loophole. It says the Secretaries of State and Homeland Security have the discretion to admit people on a “case-by-case” basis, specifically giving scope for exceptions that would “enable the United States to conform its conduct to a pre-existing international agreement”. Prime Minister Malcolm Turnbull – who is expected to have his first conversation with Mr Trump since his inauguration on Sunday – has seized on the development. “It is quite clear that the administration has set out in the order the ability to deal with existing arrangements such as the one that we have,” he told journalists on Saturday. “We are very confident and satisfied that the arrangement will continue.” However, it’s still unclear how many refugees the US will take, even if the agreement does proceed. The government has been vague on that point. Mr Turnbull says he is looking forward to the phone call. ‘The madness is eating us alive’: Inside Australia’s asylum camp on Nauru “We are very, very close friends and very strong and trusted allies. The relationship between the United States and Australia gets stronger all the time and I have no doubt it will be stronger and deeper and more engaged during his administration.” Meanwhile, newly sworn-in US Secretary of Defence James Mattis has ordered a review of the costs of F-35 Joint Strike Fighter programme – another decision that could affect Australia, which is buying 72 of the troubled next-generation fighters. But Defence Industry Minister Christopher Pyne does not believe the review will spell trouble for the programme or for Australia’s order. “Australian jets will be received as per the currently approved schedule. The production schedule won't change as a result of this report,” a spokesman for My Pyne said.