US voter anger against the war in Iraq saw Bush's Republican party lose control of the House of Representatives and possibly Congress in mid-term elections on Wednesday, prompting the resignation of Defence Secretary Donald Rumsfeld.
"I will be telling him (Bush) that Australia's view is that it would be against everybody's interest, except the terrorists, for the coalition to leave in circumstances of defeat," Howard told reporters on Thursday.
Howard is due to hold talks with Bush on the sidelines of the Asia Pacific Economic Co-operation forum in Vietnam next week.
Staunch US ally Australia, which has about 1,500 troops in and around Iraq, was one of the first nations to join the 2003 US-led war that ousted former Iraqi president Saddam Hussein.
Howard said he was sure the Republican defeat would not make the United States, or its ally Britain, fundamentally change their positions on Iraq.
"Although they are clearly looking for ways in which their tactics may change, their strategy is not going to change, they are not going to suddenly pull out of Iraq," he said.
"We have to take a little bit of a reality check. Clearly the President has reacted to the vote. That is sensible. But his reaction does not amount to a fundamental change of direction."
Bush on Wednesday conceded that voter discontent with Iraq played a part in his party's "thumping" by Democrats. He also acknowledged his Iraq policy was "not working well enough, fast enough" but refused to back down.
Rumsfeld, one of the staunchest defenders of Bush's Iraq policy, resigned after the heavy Republican losses.
Howard described Rumsfeld's resignation as a political gesture, adding that he would maintain friendly ties with the former defence secretary.
"I like Donald Rumsfeld. He's been a controversial Defence Secretary. On a personal level I enjoyed Donald Rumsfeld's company and I will in the future," he said.

Copyright Reuters, 2006