Prime Minister Tony Abbott says US President Barack Obama is doing the right thing by weighing up options before taking action in Iraq.
Insurgents from the Islamic State of Iraq and the Levant (ISIL) have taken a swathe of mostly Sunni Arab territory in northern Iraq since launching an offensive on Monday.
The US has pledged support for the government of Iraqi Prime Minister Nuri al-Maliki in fending off the onslaught.
On Friday, US President Barack Obama said Washington was considering options over Iraq but would not be sending in troops.
His national security team is working on a range of options, likely to include air strikes.
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But he is under pressure to respond quickly and take alternative advice, with one senior Republican figure describing him as "taking a nap" on Iraq.
Mr Abbott, who met with US defence and intelligence chiefs at the Pentagon in Washington, told reporters in Houston on Saturday that the issue was getting urgent attention.
"This is getting round the clock attention in Washington, and indeed elsewhere," Mr Abbott said.
"You don't want to make an incredibly difficult situation worse - that is why it is important to weigh the options, to look at the situation as it is unfolding and then make the right decisions."
He said there were Australians in Iraq and he and Foreign Minister Julie Bishop would have more to say about this soon.
Asked about Australia's response, Mr Abbott said there would be the "sort of discussions that close allies have with each other" before any involvement.
"The important thing at the moment is to let the Americans work their way forward."
He described the Islamic State as an extremist splinter group "too radical even for al-Qaeda".
