WASHINGTON—Iraq has privately signaled to the Obama administration that it would allow the U.S. to conduct airstrikes with drones or manned aircraft against al Qaeda militant targets on Iraqi territory, senior U.S. officials said Wednesday.

The Obama administration is considering a number of options, including the possibility of providing "kinetic support" for the Iraqi military fighting al Qaeda rebels who seized two major cities north of Baghdad this week, according to a senior U.S. official who added that no decisions...