Underscoring the delicate balancing act the West faces, ambassador Mouayed Saleh also significantly warned that Baghdad could look to Iran for more help if the US and its allies didn't step up when the time came.

Mr Saleh, pictured, put an optimistic face on Iraq's challenge in battling an al-Qaeda splinter group, which has seized swathes of the country's north including the major city of Mosul, and said his government was not yet asking for help.

Instead, Baghdad was still weighing up whether it could handle the insurgency on its own or needed help from the US and other nations including Australia.

But he hinted the government of Nouri al-Maliki could ask for air strikes and expressed openness to the possibility these could be backed up by Australian surveillance planes, P-3 Orions.

''When the time comes to ask for that, I'm sure we're going to ask for that and some other things that we will be needing … We can ask for that help certainly,'' he said when asked about the patrol planes.

It remains unclear what kind of assistance Australia might send. It was understood on Tuesday night that Canberra was still waiting on word from Washington as to what contribution was needed.

Mr Saleh said Iraq accepted the 250 US troops that will be sent to protect its embassy but warned against further ground troops, saying they would anger locals.

''That's why we are not asking for military forces to be on the ground,'' he said. ''That probably will start some resentment from the Iraqi people and turn them against it. They stay within the embassy complex I think it's OK but… if they were on the streets, on the ground, fighting along with the Iraqi military, that's what I mean.''

Mr Saleh denied reports that Iran had already sent troops, insisting that Iraq was ''an independent country'' and would not stand for Tehran's meddling.

The US and Iran are discussing co-operation, as both want to beat back the Sunni jihadists.