For good reason, Russia is dominating headlines in Washington, again.

Another senior member of the Trump inner circle, Attorney-General Jeff Sessions, is fending off questions about contacts with the Russian ambassador during last year's election campaign.

But what of our relationship with Moscow? Where has it been and where is it heading?

If you ask Russia's ambassador to Australia, Grigory Logvinov, slowly but surely things are getting better.

That is probably based more on hope than expectation.

The reality is our two countries have been in a state of frozen disagreement for the past three years.

Starting with Russia's annexation of Crimea and the firm belief Moscow is fuelling the rebellion in eastern Ukraine, the relationship reached a new low with the shooting down of MH17 over the breakaway territory.

Australia-Russia relations reached a new low after the downing of MH17. ( Supplied: OSCE )

Dozens of Australians and Australian residents were among the 298 passengers and crew killed.

Russia rejected the conclusions of a Dutch investigation identifying the missile launcher as having come from and returned to Russia.

Moscow said the deadly missile came from the Ukrainian side and used its veto in the UN to prevent the establishment of a tribunal to try the guilty.

That infuriated our Foreign Minister, Julie Bishop, who at the time said: "The exercise of the veto today is an affront to the to the 298 victims of MH17 and their families and friends.

"Russia has made a mockery of its commitment to accountability."

In 2015 Julie Bishop lobbied at UN headquarters for a UN-backed tribunal into MH17. ( ABC News )

Added to that palpable anger were sanctions that were imposed on Russia, a favour that was returned, with the scene set for a prolonged and frosty relationship.

At the Russian ambassador's residence, in Canberra's favoured inner south, Mr Logvinov tells me despite the ongoing tensions he has hope for the future.

"Hopefully we are now getting out of this quite difficult time and turning more positive," he says.

"One should try to understand each other."

But despite that cautious optimism, the basic differences remain.

Australia is demanding Russia hand Crimea back to the Ukrainians — which is not happening, Mr Logvinov says.

"Everyone should understand the real situation and not base our policy on a development which is absolutely impossible," he says.

On sanctions there is room to move, but only if Australia lifts them first.

"We would be eager to lift the sanctions, as we say, tomorrow — but it's reciprocal," he says.

Mr Logvinov denies there have ever been Russian soldiers or weapons deployed in the rebel-held east of Ukraine. He says the Ukrainian Government should look to itself when it comes to blame.

"We used to say that any bad government looks at the cause of its own doings outside of the country," he says.

"Thats what they say about you," I remind him.

"Do we blame Obama on all difficulties or wrongdoings within Russia?"

The ambassador replies: "No."

All these issues continue to colour our relationship with Moscow. If there is room for compromise, it's not clear where it will come.

Australia is not about to drop demands for justice for the victims of MH17.

Nor is it likely our Government is going to accept Crimea is a lost cause, or suddenly believe Moscow when it says it has nothing to do with the rebellion in eastern Ukraine.

What might have changed, and drastically, was US President Trump's approach to Russia, which could have opened the possibility of a fresh start with Canberra too.

But now that relationship is tangled in ongoing suspicions of backroom deals with Trump officials, dramatic change there is probably off the table, for the moment at least.

All of which leaves the Canberra-Moscow relationship snap-frozen in a Siberian cold, with no obvious way out.

Mr Logvinov says that despite the strained relationship he remains an optimist.

Unless something extraordinary happens, he will need all the positive energy he can muster to sustain the hope a toxic situation can really be turned around.