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MELBOURNE, Dec 28 AAP

December 28 2012, 11:01AM

The Australian share market has opened higher with traders focusing on late gains made in the US session rather than the fact that leaders there are yet to agree on avoiding the looming fiscal cliff.

At 1045 AEDT on Friday, the benchmark S&P/ASX200 index was up 22.1 points, or 0.46 per cent, at 4,670.1, while the broader All Ordinaries index rose 22.5 points, or 0.48 per cent, at 4,683.9.

On the ASX 24, the March share price index futures contract was up 26 points at 4,654 with 5,737 contracts traded.

US stocks edged lower but recovered some ground in the last hour of trade on reports that leaders would meet this weekend after Senate Majority Leader Harry Reid had earlier a compromise was unlikely before the January 1 deadline.

The White House and Congress have until New Year's Eve to reach a compromise on how to avert the "fiscal cliff", a year-end crisis that could lead to stiff tax hikes and drastic budget cuts that might halt growth.

While the "cliff" talks continued to dominate market sentiment, no-one really knew what the result would be despite several weeks of optimism, said IG Markets market strategist Stan Shamu.

"No-one really knows what's going on to be honest, everyone is just responding or reacting to these headlines for now," he told AAP.

The other factor that has pushed the Australian market to 17-month highs is an improving iron ore price.

The major miners all posted gains after the iron ore price climbed three per cent overnight to $US139.40 ($A134.95).

Rio Tinto gained 95 cents to $66.40, BHP Billiton had added 37 cents to $37.36 and Fortescue Metals had put on six cents to $4.59.

Stocks in the retail space were mixed following Thursday's gains on reports suggesting strong and possibly record high Boxing Day sales.

JB Hi-Fi was 23 cents higher at $10.49, Myer was half a cent higher at $2.135 and David Jones had lost one cent to $2.40.