The UN Security Council on Thursday demanded urgent inclusive dialogue in Iraq and condemned "terrorist" activities, but stopped short of mulling action against militants advancing on Baghdad.

The Council met for two hours behind closed doors as Kurds captured the contested oil city of Kirkuk and the United States contemplated air strikes to bolster Iraq's collapsing army.

The 15 members expressed unanimous support for the government and people of Iraq in their fight against terrorism and called for broad-based dialogue, said rotating president Russia.

"This is a great opportunity for a fresh start in having an all-inclusive political dialogue and also in resolving the multitude of issues," Russian ambassador Vitaly Churkin said.

"There must be a strong and intensified effort to start this dialogue," he added, after Iraqi MPs failed to show up to authorize the prime minister's request for a state of emergency.

Security Council members urged the Iraqi government and the international community to support the UN mission on the ground, especially in response to the humanitarian crisis, Churkin said.

He said members condemned "all terrorist and extremist activities" but warned that Iraq had to address much deeper and more complex political, sectarian, social and oil disputes.

"The more immediate thing is to reach some kind of accommodation between the main political forces to make it easier for them all to fight the terrorists," he added.

French ambassador Gerard Araud agreed, saying on Twitter: "Iraqi crisis has an essential political dimension. Need for Bagdad (sic) to respond to the concerns of the Sunnis and to outreach to the Kurds."

Although jihadists have swept south from the northern city of Mosul to Saddam Hussein's hometown of Tikrit, Churkin said the UN envoy to Iraq, Nickolay Mladenov, did not see an immediate danger of the violence spreading to Baghdad.

Diplomats said Mladenov briefed by video link that the UN mission had only a "very limited" ability to respond to the humanitarian needs of more than 500,000 displaced from Mosul.

He described the crisis as the biggest threat to Iraqi sovereignty for some time, they added.

- What can Council do? -

But it is unclear what the Security Council can actually do.

Asked whether it was contemplating action or measures against blacklisted terror group the Islamic State of Iraq and the Levant, Churkin said no suggestions to that effect had been made.

US President Barack Obama said Thursday that Washington was "looking at all the options," but Churkin refused to comment on any future potential actions by specific countries.

So far the UN mission in Iraq, headed by the former Bulgarian foreign minister Mladenov, has focused on helping the government with political reconciliation efforts and elections.

Churkin said the Council may look closer to the time as whether it needs to adjust the mandate of the mission when it comes up for renewal at the end of July.

Russia has blamed the 2003 US-led invasion and inadequate equipping, training and restructuring of the Iraqi army and the status apparatus before US troops left in 2011 as the root cause.

"Clearly, the war on terrorism is not over," Churkin told reporters.

Russia has called for the United Nations to look closely at the broader terrorist problem in the Middle East, he said.

"As far as we're concerned, we believe that the mission was not accomplished," he said.

Mladenov has previously emphasized the impact of the civil war in Syria on deteriorating security in Iraq, and the spillover of extremists groups across the border into Iraq.