New Zealand Prime Minister John Key has ruled out sending SAS troops to Iraq in response to a request from the US for an increased contribution to the war against Islamic State.

In December US Defence Secretary Ash Carter sent a letter to the government, and other allies, asking for contributions to be stepped up.

The use of special forces, and other measures, were mentioned.

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"It's not my intention to send the SAS," Mr Key said at his post-cabinet press conference on Monday.

"I don't think it fits with what the Iraqi government wants ... the Iraqi government wants their troops trained and they want to fight their own battles."

New Zealand has about 140 troops and support staff in Iraq helping train Iraqi forces to fight Islamic State.

"We see real progress being made, we're training their forces and they're doing well," Mr Key said.