The Chief of the Defence Force Mark Binskin has confirmed he has worked with his Kiwi counterpart on a further training mission to Iraq but says "no final decision" has been made by the Abbott government.
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As Fairfax Media reported on Saturday, the Abbott government is poised to announce it will send between 200 and 300 Australian Defence Force troops to train the Iraqis on bases in conjunction with New Zealand forces.
"I and my New Zealand counterpart have worked very, very closely on developing options that were put to both governments. But the government of Australia is yet to make a final decision," Air Chief Marshal Binskin told a Senate estimates hearing.
Air Chief Marshal Binskin and the secretary of the Defence Department Dennis Richardson described a difficult job ahead for coalition forces in raising the Iraqi forces to the level where they could retake territory from the Islamic State terror group and hold the territory.
Mr Richardson said it would likely be at least three years before the Iraqis could maintain stability in their own country.
New Zealand Prime Minister John Key announced on Tuesday that his government would deploy 143 troops on the training mission and indicated that they would work alongside an Australian force.
However Prime Minister Tony Abbott has made no similar announcement.
Mr Abbott is due to visit New Zealand this weekend.
Fairfax Media understands that the new training force will remain "behind the wire" on bases. It will gradually replace the current force of about 200 special forces commandos who are advising and assisting the Iraqis.
Senior sources have told Fairfax Media that the new training forces are expected to start work in the war-torn country by the middle of this year.
But the 200 commandos currently on the ground are expected to start drawing down over the second half of 2015, meaning that by the end of the year, the total number of Australians on the ground will only be slightly higher than it is now.
The handover reflects the fact that the operation against the militants will evolve over the next six to 12 months from an acute effort to prop up the demoralised Iraqi forces to a longer-term training job.
It indicates that the Australian Defence Force will be involved in Iraq at least until the end of the year and likely well beyond that.
Mr Richardson warned that the Islamic State was a formidable fighting force commanded by experienced leaders, many of them former senior Iraqi army officers who turned against the US after the 2003 invasion when the ruling Baath Party and Army were disbanded.
"Quite obviously mistakes were made after 2003, (with) the de-Baathification program. It's important also to appreciate that Daesh or ISIL is well-led," he said, using the alternative names for the Islamic State.
"It is not a rabble of immature foreign fighters that is running around on the back of utes.
"It is led by experienced former Iraqi generals and others with substantial military experience. As brutal and as nasty and terrible as ... they are, as an enemy, you shouldn't underestimate their capability."
Of predictions that it would take two years to build up the Iraqis to a capable enough force, Mr Richardson told the hearing: "I think two years would be optimistic. The US defence spokespeople have talked about a minimum of three years. I think that would certainly be more realistic."
Air Chief Marshal Binskin said that the coalition air strikes had put Islamic State "on the defensive" but stressed there was "a long way to go".
"Their leadership hides … Adding to this, Daesh is sending raw, unskilled recruits into the fight and they are enlisting children to carry out their deadly, depraved work," he said.
"However, despite the successes thus far in Iraq, there remains a long way for us to go."
