A stable and inclusive government in Baghdad is a prerequisite for Australian combat involvement and the RAAF's Super Hornets would be first choice, Defence Minister David Johnston says.
Senator Johnston said there would need to be a specific invitation from Iraq and Australia would want to settle rules of engagement.
He said Australia hadn't been formally approached to participate, other than to deliver humanitarian aid.
"We do have a lot of capability at our fingertips. We did participate in 2003," he told ABC television.
"We have Super Hornets. They are incredibly capable. They are exactly what flies off US aircraft carriers. That's an obvious first port of call were we to participate with our friends and allies."
Senator Johnston said the aircraft were at a good state of readiness, as they were at all times.
"Apart from saying that, I wouldn't want to say any more," he said.
Immigration Minister Scott Morrison, who is a member of the cabinet's national security committee, said people shouldn't leap to conclusions about how the government may respond to the Iraq crisis.
The government would carefully and methodically consider any requests for military involvement, he told Sky News.
"The thing that would govern all our judgments would be 'what is in Australia's national interest'?"
Labor has called for urgent briefings on any expanded military role in Iraq, with reports the US is seeking Australia's support for air strikes against Islamic insurgents.
Labor frontbencher Tony Burke said the opposition wanted an urgent briefing on the developments.
"Clearly from the comments from the defence minister last night, there are new issues for us to be briefed on and we want that to happen urgently," he told Sky News.
Deputy Labor leader Tanya Plibersek said the international community had a responsibility to provide humanitarian assistance.
"Anything more than that has to be after a great deal of thought and consideration," she told ABC radio.
US President Barack Obama is reportedly close to a decision on authorising further air strikes, with administration officials telling the New York Times that Britain and Australia may be asked to join the campaign.
Senator Johnston said the US and others, including Australia, wanted to see a stable Iraqi government and that could not occur until September 10 when the new prime minister takes over.
He said he, Foreign Minister Julie Bishop, US Secretary of State John Kerry and Defence Secretary Chuck Hagel believed there should be a more inclusive government in Baghdad before allies would consider military assistance.
"It's not just a simple matter of deploying aircraft, flying them in and doing the work," he said.
Senator Johnston ruled out any involvement of Australian combat forces on the ground in Iraq.
Also out of the question was operating aircraft from bases inside Iraq.
Australia does have a staging base in the United Arab Emirates, a considerable distance from Iraq. It's regarded as more likely operations would be conducted from bases in Turkey or Kuwait.
Share
