AFP understands that all four of the crew aboard the helicopter are Australian.

“The families of the four aircrew have been notified of this incident and our hopes and thoughts are very much with the aircrew and their families,” Marles added.

“We desperately hope for better news during the course of this day.”

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Australian police on Saturday said debris had been found from the crashed helicopter.

“We have located a number of items of debris that would appear to be from the missing helicopter,” said Queensland Police Superintendent Douglas McDonald.

He insisted hope had not yet faded for finding the crew alive, saying “at this time it remains a search and rescue operation”.

Officials have not yet said what caused the incident, which came as the Talisman Sabre exercise was entering its second week.

The drills are designed to test large-scale logistics, land combat, amphibious landings and air operations, and to signal the strength of Western military alliances.

Japan, France, Germany, and South Korea are also taking part.

US Defence Secretary Lloyd Austin and Secretary of State Antony Blinken are in Australia for meetings with Marles and Foreign Minister Penny Wong which coincide with the drills.

Both men offered their support, as US personnel aided the rescue effort.

“It’s always tough when you have accidents,” Austin said. “But the reason you train to such a high standard is ultimately so you can protect lives.”

It is not yet clear whether the military drills, which are due to end on August 4 will resume.

Even before the incident, Canberra had announced it will replace its fleet of ageing Taipan helicopters with US-made Black Hawks.

Australian officials have complained about having to repeatedly ground the European-made Taipans, citing difficulties with maintenance and in getting spare parts.

“We just haven’t got the flying hours out of the Taipan that we need. We are confident we can get that from the Black Hawks,” Marles said in January this year.

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In March, an MRH-90 Taipan flying south of Sydney suffered engine failure during a nighttime training exercise, forcing the crew to ditch into the ocean.

They survived with only minor injuries, but the entire Taipan fleet was grounded for one month.

Meanwhile, Washington will bolster its shrinking arms stockpiles by helping Australia develop a missile-manufacturing and exporting industry, Marles said on Saturday after high-level talks between the two countries.

“We are really pleased with the steps that we are taking in respect of establishing a guided weapons and explosive ordnance enterprise in this country.”

The project will see Australia develop guided multiple launch rocket systems – or so-called GMLRS.

The war in Ukraine has put a heavy strain on military supply chains in the US, steadily depleting stocks of missiles and other munitions.