The Australian Prime Minister, Julia Gillard says she's been advised 123 people have been rescued from the stricken boat.

The Australian Maritime Safety Authority says 2 merchant ships are there now, pulling people out of the water.

One of the ships has released a photo of the asylum seeker boat earlier this morning which shows it upright, though low in the water.

Two Australian navy vessels and a Defence plane are on their way to help and should reach the boat this afternoon.

The ABC understands it was carrying mostly Afghans and there were women and children on board.

The distress call came through at about 6:20am AEST when the boat was 107 nautical miles north of the Island.

Indonesian authorities say they are sending a Hercules military aircraft to the scene of the capsized boat.

Indonesia's search and rescue authorities are poorly coordinated and most of their navy is focused on the busy shipping lanes and maritime border to the north.

Political divide

The latest disaster comes almost a week after a boat carrying more than 200 asylum seekers capsized in the Indian Ocean, killing up to 90 people.

Australia's Opposition has appealed for the ruling Labor Party to support legislation for offshore processing that would allow Australia to send asylum seekers to any country that has signed the United Nations refugee convention.

The Opposition leader Tony Abbott has moved a motion in parliament to bring the bill forward.

He says the Opposition bill would allow offshore processing in Nauru, Papua New Guinea and the Phillipines but not Malaysia.

"If the government is serious about crafting a stronger policy response based on the united will of the parliament or the almost united will of the parliament, I think they should act on the basis of the legislation that we are putting forward today," Mr Abbott said.

The Prime Minister says she will immediately bring on a bill from the Independent MP Rob Oakeshott that would allow the Malaysia solution to go ahead.

"To amend migration legislation and facilitate offshore processing. That piece of legislation has already completed it's second reading so we would be asking the House at that time to complete dealing with the bill," Ms Gillard said.

Canberra clinched a deal last year to send 800 asylum seekers to Malaysia in exchange for 4,000 of that country's registered refugees, in a bid to deter boat arrivals.

But Prime Minister Julia Gillard's minority government was unable to pass the required legislation through parliament without the support of the opposition.

The Opposition refuses to support the plan because Malaysia has not signed the United Nations refugee convention.

Hopes for compromise

A senior Opposition MP Christopher Pyne has indicated there could be room for fresh negotiations, if the government considers returning to the former Howard government's policy of limited three-year visas for those found to be refugees.

"If the government came back and said 'we'll reintroduce temporary protection visas', I'm sure the Opposition would talk turkey," Mr Pyne has told Sky News.

"But they haven't done that. They simply expect us to accept their dud policy."

Australia's Immigration Minister Chris Bowen says the government has shown a willingness to accept a compromise deal, and has pointed the finger at the Opposition for refusing to budge.

But he has welcomed Mr Pyne's comments.

"Any indication of a willingness to negotiate with the government and to return to the table after the Coalition broke off the negotiations last year is very welcome," Mr Bowen told ABC Newsradio.

"We genuinely want to see a breakthrough here.

"We've said that we do not believe TPVs [temporary protection visas] are effective - and that remains the position.

"But you don't go into negotiations ruling things in or out. I don't want to slam the door on any discussions." (ABC.NET.AU)

Another boat sinks near Christmas Island


According to breaking news reports, a vessel with more than 100 asylum seekers on board  has capsized near the Christmas Island. 

The Australian Maritime and Safety Authority said rescue operations were continuing.
"We are rescuing survivors," an AMSA spokeswoman told AAP.

A few days ago a similar vessel with some200 suspected asylum seekers on board capsized near Christmas Island and some 150 were rescued .


A P-3 Orion plane is also on its way to the scene.

Two merchant vessels are already on the scene assisting in the rescue, the ABC reported.

The boat went down 107 nautical miles north of Christmas Island.

AMSA said it received a distress call via the Australian Federal Police on Tuesday morning at 6.17AM AEST. A merchant vessel arrived at 10.30AM, AMSA said.

The spokeswoman said the boat was in Indonesian waters in 'fair, but not ideal' conditions.

ABC correspondent Matt Brown said Indonesian authorities told him that it is mostly Afghans on the vessel, including a number of women and children.

Last week, a boat thought to have over 200 people on board went down in the same area; up to 90 people may have lost their lives, leading to another round of soul-searching, debate and deadlock amongst federal politicians.

Soon after the news was announced, Opposition Leader Tony Abbott and Shadow Immigration Spokesperson Scott Morrison held a press conference to discuss legislation on offshore processing that they intend to put before parliament.

Tony Abbott said he was seeking to find common ground 'that could found a stronger policy response than that which the government currently believes is available to it.'

Labor backbencher Graham Perrett said on Twitter: "150 people in the water right now. That's one for every single elected free-thinking Member of the House of Reps."

Australian Greens deputy leader Adam Bandt also tweeted "terrible reports another boat capsized".

Independent MP Craig Thomson said there was a renewed sense of urgency to resolve the issue before parliament suspended for the winter break on Thursday.

"The current impasse between the parties is not working," he told AAP.

"We should not leave Canberra until we have resolved this issue."

Nationals MP Tony Crook said: "My conscience has certainly been pricked by this."

Independent MP Andrew Wilkie urged the parliament to act quickly.

"This parliament has to stop the problem. Both the government and opposition have to swallow their pride," he said. (Source: World news Australia)