"The Iraqi government has not asked us to withdraw," Ron Mark said.

New Zealand personnel are "as safe as they can be" in Iraq, acting prime minister Winston Peters says.

"Now is the time for restraint and de-escalation, and for diplomacy to take over," Peters said as tensions escalated in the region on Thursday.

Intelligence organisation DWS on Wednesday afternoon claimed Iranian missiles struck the Taji military complex in Iraq, where Kiwi troops were based.

But Peters said the ballistic missiles, which were fired at two US bases, did not target the camp.

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Earlier, Defence Minister Ron Mark said he had "absolute confidence" in Defence Force leadership.

RNZ Iraqi MPs have passed a resolution calling for foreign military to leave the country, amid a growing backlash against the US killing of top Iranian general Qasem Soleimani in a drone strike at Baghdad airport.

Forty-five Defence Force personnel were thought to be in the Taji​ military complex near Baghdad and another five in the Iraqi capital itself.

The Iranian attacks on US and coalition forces in Iraq were apparent retaliation for the killing of Iranian Quds force leader Qasem Soleimani, who was killed in a US drone strike.

Since Soleimani's killing, Iraq's parliament voted in a non-binding resolution to expel US and allied forces.

"The Iraqi government has not asked us to withdraw," Mark said.

"We have a mandate for a mission."

Mark said he had faith in the ability of New Zealand's coalition partners to assess the situation on the ground and it was not for him to interfere in operational matters.

The Defence Force put its training activities in Iraq on hold after Soleimani's death.

And Mark on Wednesday told media: "Yes, we are concerned."

Mark said the New Zealand Government wanted calm, de-escalation and dialogue to resolve regional tensions.

He said New Zealand was talking to its international coalition partners and "situational awareness" was pivotal as the US-Iran relationship deteriorated.

FORMER PM CALLS FOR CALM

Jim Bolger, who was prime minister of New Zealand during the first Gulf War, supported calls for calm and de-escalation.

Bolger said at times of political crisis, any New Zealand message to belligerents would probably be conducted through senior defence and foreign affairs officials.

"The prime minister would be totally across it. I would hope that the prime minister would also make certain the Opposition was totally briefed."

He said the current Government would be "horrified" if New Zealanders in Iraq were killed accidentally or deliberately.

"We're there to try and help Iraq, to help [build] a sensible defence force."

The Defence Force has previously said Kiwi and Australian personnel have trained tens of thousands of Iraqis at Taji.

But New Zealand training activities in Iraq were put on hold after Soleimani's death.

'SUCKER PLOY' SUGGESTED

Defence analyst Dr Paul G Buchanan of 36th Parallel Assessments said Iran had a vast range of military and economic options available.

Those included blocking foreign airliners from its airspace, choking oil exports through the Strait of Hormuz and activating its proxies including Hezbollah to create chaos abroad.

He said Iranian missiles were likely the "first in a series of manoeuvres".

Buchanan said Iran was using intermediate-range ballistic missiles which were precise, but had caused few, if any, casualties.

That suggested Iran might be engaging in a "sucker ploy" to provoke a US over-reaction.

Buchanan said US President Donald Trump was poorly-advised and had not thought through the consequences of killing Soleimani.

Germany this week announced it was partially withdrawing troops from Taji and Baghdad.

Buchanan said that could provide New Zealand with "diplomatic cover" if the remaining 45 people at Taji were to be withdrawn.

He said the conflict "may not be over for a long time" and broader tensions between Sunni and Shia Islam complicated the situation.

"If conflict breaks out in Iraq, the conflict is going to be sectarian ...These militias have genocidal urges."

Buchanan said foreign troops in Taji at least enjoyed the protection of air cover, which the US supplied from a mix of aircraft carriers and air bases in Iraq and around the region.

He said New Zealand diplomats would likely have more success talking to Iranians than to Trump.

New Zealand and Iran had good trade relations, he said.

Stuff has approached the Iranian embassy in Wellington for comment.

New Zealand has an embassy in Tehran, Iran's capital.

'SOBER HEADS' NEEDED

University of Auckland professor Stephen Hoadley said Iran had a "formidable missile arsenal" with weapons capable of striking across the Middle East, including Israel and all over the Persian Gulf.

About 4pm New Zealand time, he said the Iranians appeared to have stopped attacks.

Iran would now be hoping "that sober heads will prevail", Hoadley said.

Taji was a vast complex, Hoadley added.

This week's events should not deter Kiwis from continuing the mission Mark referred to, Hoadley added.

He said his advice to political and military leaders would be: "Stick it out, don't run, don't panic. Carry on, support the Iraqi forces."

Economist David Butcher, who'd previously visited Iran and Iraq, said any impact on New Zealand's economy would depend on the intensity of conflict.

"Once shooting wars start, anything can happen."

But he said the US was probably no longer as dependent on importing Middle Eastern oil as it had been a few years ago, thanks to a boom in its domestic shale oil sector.

Butcher said in the 1980s Iran-Iraq war, "New Zealand was successfully selling meat to both sides".

The Ministry of Foreign Affairs and Trade (MFAT) said on its website the security situation in the Middle East was "unpredictable and may become increasingly volatile".

"The security situation could deteriorate with little to no warning. New Zealanders in the Middle East region are advised to avoid any demonstrations, marches, processions, and keep away from military sites."

MFAT added: "New Zealanders currently in Iran should carefully consider their need to remain."