The Abbott government is expecting a "specific" request within days for Australian military involvement in a new war in Iraq after US President Barack Obama announced he would dramatically escalate an aerial bombing campaign and send military advisers.

The US-led assault, co-ordinated with international partners including Australia, will aim to seek out and destroy fighters from the Islamic State and will probably take months or even years.

Australia is prepared to provide fighter jets for bombing runs as well as support aircraft, but may also be asked to send Special Forces for training, advice and intelligence-gathering, though they would expressly have no combat role.

The US strategy, outlined by Mr Obama in a prime-time address in Washington, came as Australian intelligence authorities prepared to raise the nation's terrorism alert level – a move expected to be announced on Friday.