But the White House also insisted it had no intention of sending ground troops.

The remarks came after the cities of Mosul and Tikrit fell to ISIL terrorists during a lightning advance.

The US has begun moving defense contractors working with the Iraqi military to safer areas.

"We can confirm that US citizens, under contract to the government of Iraq, in support of the US Foreign Military Sales (FMS) program in Iraq, are being temporarily relocated by their companies due to security concerns in the area," state department spokesperson Jen Psaki said.

Several hundred were being evacuated from Balad air base to Baghdad, a US defense official told AFP.

Militants of the so-called Islamic State in Iraq and the Levant (ISIS), an Al-Qaeda offshoot, are believed to be planning to push further south to the capital, Baghdad, and regions dominated by Iraq's Shia Muslims.

Unconfirmed reports on Thursday said Iraqi forces had launched air strikes on Mosul and Tikrit targeting the militants.

Correspondents say that if ISIL can hold Mosul and consolidate its presence there, it will have taken a giant step towards its goal of creating an Islamist emirate that straddles Iraq and Syria, where insurgents control a large swathe of territory.

Fears of ISIL sparking a wider uprising have increased with reports that former Baath Party members loyal to Saddam Hussein have joined forces with the terrorists.

One resident in Tikrit, Saddam Hussein's former hometown, told the AP news agency that fighters raised posters of the former dictator after driving the army out.

The United Nations Security Council said on Thursday it unanimously supported Iraq's government and people in their "fight against terrorism".

Earlier it said the humanitarian situation around Mosul, from where up to 500,000 people have fled, was "dire and... worsening by the moment".

"There will be some short-term immediate things that need to be done militarily," Obama told reporters at the White House as he met Australian Prime Minister Tony Abbott.

"I don't rule out anything because we do have a stake in making sure these jihadists are not getting a permanent foothold in Iraq, or Syria for that matter."

White House spokesman Jay Carney subsequently added that President Obama was referring to not ruling out air strikes. "We are not contemplating ground troops," he said.

Iraq's ambassador to the US, Lukman Faily, earlier told the BBC this was the "most serious situation" faced by the country in recent years.

A parliamentary vote to grant PM Nouri al-Maliki emergency powers was delayed earlier after MPs failed to turn up.

Just 128 out of the 325 MPs were present for the vote.

Correspondents say the failure of the Iraqi parliament to achieve a quorum to vote on emergency powers says much about the fragmented state of Iraqi politics.

In the north of the country, Kurdish forces have claimed control of the oil city of Kirkuk, saying government forces have fled.

Iraqi government forces slowed the insurgents' advance on Wednesday outside Samarra, a city just 110km (68 miles) north of Baghdad.

But reports have emerged of the terrorists bypassing Samarra and seizing the town of Dhuluiya, 90km north-west of the capital.

Security in Baghdad has been stepped up after a video emerged of the militants threatening to march on the city.

BA/BA