Mr Turnbull was responding to claims in the Australian media that Trump is on the verge of ordering a strike to destroy Iran’s nuclear facilities.
Australian network ABC reported senior figures within the Australian Government believe Trump is preparing a strike, and that it could even happen next month.
They also claimed both British and Australian intelligence agencies are helping the US with targeting.
Mr Turnbull dismissed the reports as “speculation”.
He admitted: “I saw a story claiming that, on the ABC, and citing senior Australian government sources.
“It’s speculation, it’s citing anonymous sources.”
Tensions between the US and Iran have skyrocketed in recent days, with the leaders of the two countries exchanging threats.
Earlier this month Iranian President Hassan Rouhani provocatively claimed “war with Iran is the mother of all wars” adding “do not play with the lion’s tail or else you will regret it”.
Trump furiously responded to Mr Rouhani directly tweeting in all-caps: “Never, ever threaten the United States again or you will suffer consequences the likes of which few throughout history have ever suffered before.”
The commander of Iran’s elite Quds force responded that Iran would “end” any war between the two states.
In May Trump pulled America out of what he described as a “horrible one-sided” deal with Iran designed to curb the country’s nuclear ambitions.
Trump alleged that Iran wasn’t abiding by the spirit of the agreement and that it was backing terror groups across the Middle East.
Britain, France and Germany opposed Trump’s decision to withdraw and issued a joint statement expressing “regret”.
The United States is now re-imposing sanctions on the Iranian economy.
Iran has always insisted that it’s nuclear program is peaceful and not aimed at getting nuclear weapons.