New Zealand and Australia are discussing the potential creation of a "travel bubble" between the two countries, sources said on Monday, even as Australia reported its highest number of coronavirus cases in two weeks.

New Zealand Prime Minister Jacinda Ardern will take part in a meeting of Australia's emergency coronavirus cabinet on Tuesday, the Australian government said, stoking speculation that two-way travel could be permitted in the near future.

"The idea of a bubble with Australia was floated two weeks ago, and this is an example of the sort of action that could happen within it, while always ensuring the protection of public health," New Zealand Foreign Minister Winston Peters said in a statement.