US President Barack Obama said Thursday that his national security team was "looking at all the options" as the crisis in Iraq unfolds, with Arab jihadists pushing towards Baghdad.

"Iraq is going to need more help from us and it's going to need more help from the international community," Obama said after Oval Office talks with Australian Prime Minister Tony Abbott.

"Our national security team is looking at all the options... I don't rule out anything."

But he also said the jihadist offensive should be a "wake-up call for the Iraqi government."

On Wednesday, the United States pledged to boost aid to Iraq, and one US official told AFP that Washington was weighing several possibilities for more military assistance, including drone strikes.

In a lightning offensive, jihadists from the Islamic State of Iraq and the Levant (ISIL) have swept up a huge swathe of predominantly Sunni Arab territory in northern and north-central Iraq, including the second city Mosul.

Forces from Iraq's autonomous Kurdish region have meanwhile taken control of Kirkuk, an ethnically divided northern city they have sought to rule for decades.

Obama noted that Washington had a "stake in making sure that these jihadists are not getting a permanent foothold in Iraq, or Syria for that matter."

Obama chided Iraq's Shiite-led government for failing to resolve differences between the country's Sunni and Shiite populations.

"Frankly, over the last several years, we have not seen the kind of trust and cooperation develop between moderate Sunni and Shia leaders inside of Iraq," he said.