President Barack Obama is sending US troops to Iraq. Around 275 military personnel are being deployed to provide security at the American embassy in Baghdad.
US and Iranian officials have also discussed the crisis on the sidelines of nuclear talks in Vienna.
Possible co-operation between the old foes reflects Washington’s alarm at the Sunni insurgents’ advance.
“We are open to discussions if there’s something constructive that can be contributed by Iran, if Iran is prepared to do something that is going to respect the integrity and sovereignty of Iraq and the ability of the government to reform,” said US Secretary of State John Kerry in a televised interview.
Obama is still ruling out sending combatant troops to Iraq while he and his advisers consider other military options including possible drone strikes.
ISIL fighters or members of the Islamic State of Iraq and the Levant have not had it all their own way. Iraq’s defence ministry has released images of air strikes by its forces on jihadist positions.
At the same time thousands of Iraqis are fleeing the vast swathe of territory in the north of Iraq which is now in the hands of ISIL militants.
And Sunnis fearing retribution are said to be leaving Shia dominated Baghdad as concerns grow that the violence will lurch towards becoming a sectarian conflict.
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