Tony Abbott says it's too soon to consider an increased deployment to Iraq, but hasn't ruled it out.
Australia has contributed 200 special forces advisers and six fighter jets to the international fight against Islamic State extremists.
News Corp reports defence officials are in talks with New Zealand counterparts about sending a combined military taskforce of 400 into Iraq with a decision due before Christmas.
"It's far too soon to be making further decisions," Mr Abbott said in Canberra on Monday.
"But yes, we certainly are talking to people. Let's see where those discussions go."
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