UPDATE 11:25am The White House has confirmed that Australia’s ambassador to the United States, Joe Hockey, has met with two of President Donald Trump’s closest advisors.

Mr Hockey met with Mr Trump’s chief of staff Reince Preibus and advisor Steve Bannon as Mr Turnbull again insisted the deal would go ahead on Thursday morning.

“Mr Priebus and Mr Bannon had a productive meeting with the Australian ambassador at the White House,” the White House official read. “They conveyed the president’s deep admiration for the Australian people.”

A number of US senators called Mr Hockey overnight to offer apologies, including former presidential hopeful John McCain.

In a statement, Senator McCain described Australia’s as “one of America’s oldest friends and staunchest allies”.

“We are united by ties of family and friendship, mutual interests and common values, and shared sacrifice in wartime,” he said.

Mr Hockey’s meeting came after Mr Trump again questioned the Australia-US refugee deal, a day after he described it as “dumb” and hours after the White House confirmed it would go ahead.

The deal to take refugees from Manus Island and Nauru was brokered between the Turnbulll Government and the US in the closing weeks of the Obama administration.

“We have a lot of countries taking advantage of us … we had one instance in Australia … I have a lot of respect for Australia, I love Australia as a country but we have a problem,” Mr Trump said early on Friday morning (AEDT).

“For whatever reason Obama said that they were going to take probably well over a thousand illegal immigrants who were in prisons and they were going to bring them and take them into this country and I said why.

“I just wanted to ask a question of you — why? 1,250… it could be 2,000 it could be more than that,” he said, questioning the number of refugees covered by the agreement.

Mr Trump listens as he’s welcomed at the National Prayer Breakfast. Photo: Getty

“I said why, why are we doing this. What is the purpose? So we will see what happens.

“You know a previous administration does something you have to respect that but you can also say why are we doing this? That is why we are in the jams that we are in.

“We have some wonderful allies and we are going to keep it that way but we are going to be treated fairly also. And this administration our allegiance will be to the American workers and businesses.”

Despite Mr Trump’s scathing criticism, the White House had earlier all but confirmed the deal would still go ahead.

On Thursday it was reported Mr Trump accused Mr Turnbull of seeking to export the “next Boston bombers” to the US, and complained that the deal was going to kill him politically, during a 25-minute phone call between the two leaders.

Earlier on Friday morning (AEDT), in a bizarre rant at what was supposed to be a solemn and traditional prayer breakfast, Mr Trump told a Washington gathering the whole world was taking advantage of America – and he would be fixing it.

Referencing the fraught phone call with Australian Prime Minister Malcolm Turnbull, Mr Trump told the dignitaries, “don’t worry about it”.

“When you hear about the tough phone calls I’ve been having … just don’t worry about it.

“They’re tough. We have to be tough. It’s time we’re going to be a little tough, folks,” he said.

“We’re taken advantage of by every nation in the world, virtually. It’s not going to happen anymore. It’s not going to happen anymore.”

Mr Trump told the Washington prayer breakfast that the world was under threat in so many ways, but “we’re going to straighten it out” …. “that’s what I do, I fix things”.

US is "taken advantage of by every nation in the world virtually" – @POTUS Donald Trump at National Prayer Breakfast https://t.co/anJOIyMJKY pic.twitter.com/vXW3N0G9uH

— BBC News (World) (@BBCWorld) February 2, 2017

Usually a pious and reflective occasion, the breakfast is held on the first Thursday of February each year and has been headlined by every president since Dwight D. Eisenhower.

‘Horrible deal’ still on: White House

Just hours later at a news conference with White House spokesman Sean Spicer, the president’s spokesman refused to discuss the rift with Australia, walking out as reporters shouted questions at him.

He did however say the Australian-US asylum-seeker swap deal would go ahead but each of the refugees on Manus Island and Nauru will have to undergo “extreme vetting” before entering America.

Mr Spicer told reporters Mr Trump was “unbelievably disappointed” and “extremely upset” about the “horrible deal” agreed to between Malcolm Turnbull and former US president Barack Obama last year.

Mr Spicer, however, gave a different assessment of Saturday’s phone call between Mr Trump and Mr Turnbull that was described in media reports as volatile, telling reporters it was “cordial” and the president has tremendous respect for the prime minister and the Australian people.

Trump defends ban order

The president defended his travel ban order at the breakfast, saying the move to temporarily bar entry to people from seven majority–Muslim countries is crucial to ensuring religious freedom and tolerance in America.

He said he wanted to prevent a “beachhead of intolerance” from spreading in the United States.

Trump said the US has taken “necessary action” in recent days to protect religious liberty, referring to his immigration action.

– with AAP, ABC and agencies