More American troops and military assets could come to Australia after a new set of rules were agreed by Prime Minister Tony Abbott and US President Barack Obama.
Mr Abbott met with Mr Obama for over an hour at the White House on Thursday, discussing security, trade and military ties.
The meeting came at a dramatic moment in Washington DC as White House and national security officials were scrambling to deal with the emerging crisis in Iraq.
"Iraq is going to need more help from the United States and from the international community," the President told reporters gathered in the Oval Office for a briefing on his talks with Mr Abbott.
"Our national security team is looking at all the options... I don't rule out anything."
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It is unknown whether Australia will play any role in dealing with jihadists who have captured several of Iraq's largest cities.
House Speaker John Boehner earlier in the day accused Mr Obama of taking a "nap" on the escalation of tension in Iraq.
The leaders' meeting ended with a deal on a new legal framework that Mr Obama said would enable the US to add to the Marines and aircraft rotated through Darwin.
With the troop levels already set to rise from 1150 to 2500, it is understood expansion could include more US ships coming to Western Australia and joint exercises involving Australian, US and Asian countries' militaries.
The president praised Mr Abbott for ensuring Australia's defence budget was increased "even under tough times".
"Aussies know how to fight. I like to have them in a foxhole when we are in trouble."
Mr Abbott said the US should not have to do all of the heavy lifting by itself.
"I want to assure the President that Australia will be an utterly dependable ally of the United States," he said.
The pair also discussed the Trans-Pacific Partnership trade agreement, involving Australia, the US and 10 other countries.
Mr Obama said he remained committed to a successful outcome in the negotiations.
The talks included a frank discussion on climate change.
It is understood Mr Obama told the prime minister he was aware of the clear mandate the coalition government had received to scrap the carbon tax.
Mr Abbott said he was committed to Australia's emission cut targets and his plans were not all that different to the US strategy.
He said Australians pay fuel excise, which could also indirectly address emissions.
Mr Obama was presented with a Sydney-made surfboard decorated in an Air Force One theme and swapped surfing stories with Mr Abbott.
