BAGHDAD (Reuters) - Australia has reached an agreement with Iraq for its special forces to support Iraqi forces in their fight against Islamic State, Australia's Foreign Minister Julie Bishop said on Sunday.

"We have reached an agreement for a legal framework and now it will be a matter for our military when our special forces will be deployed," Bishop said at the conclusion of a two-day trip to Baghdad that included meetings with senior Iraqi officials.

Australian Prime Minister Tony Abbott said on Wednesday that 200 members of the special forces had not entered Iraq and had been waiting in the United Arab Emirates since mid-September because Baghdad had not offered them formal legal protections.

Bishop told reporters on Sunday the understanding would allow the Australian special forces "to be deployed here to advise and assist the government of Iraq in building up the capacity of the Iraqi security forces".

Australian fighter jets began hitting targets inside Iraq this month as part of the U.S.-led coalition to beat back the radical group Islamic State, which controls territory in both Iraq and Syria.

(Reporting By Ned Parker and Mahdi Talaat; editing by Susan Thomas)