As the United States responded to the crisis by deploying an aircraft carrier in the Gulf, Iran warned against foreign military intervention in its Shiite neighbour.
The militants, spearheaded by the powerful jihadist Islamic State of Iraq and the Levant (ISIL), have overrun all of one province and chunks of three more since they launched their offensive late last Monday.
Security forces have generally performed poorly, with some abandoning their vehicles and positions and discarding their uniforms, though they seem to have begun to recover from the initial onslaught and have started to regain ground.
Iraqi commanders have said security forces were now starting to push the militants back, and that soldiers had recaptured two towns north of Baghdad.
They will be joined by a flood of volunteers, urged on by a call to arms from top Shiite cleric Grand Ayatollah Ali al-Sistani.
A recruitment centre for such volunteers at the town of Khales in central Iraq came under mortar attack today, leaving six people dead, including three Iraqi soldiers, police and a doctor said.
US President Barack Obama said he was "looking at all the options" to halt the offensive that has brought the militants within 80 kilometres of Baghdad's city limits, but ruled out any return of US combat troops.
Pentagon spokesman Rear Admiral John Kirby said Defence Secretary Chuck Hagel had ordered aircraft carrier USS George HW Bush into the Gulf in response to the crisis.
Obama has been under mounting fire from his Republican opponents over the swift collapse of Iraq's security forces, which Washington spent billions of dollars training and equipping before pulling out its own troops in 2011.
Iran today warned that "any foreign military intervention in Iraq" would only complicate the crisis.
"Iraq has the capacity and necessary preparations for the fight against terrorism and extremism," foreign ministry spokesman Marzieh Afkham was quoted as saying by the ISNA news agency.
"Any action that complicates the situation in Iraq is not in the interests of the country nor of the region," Afkham said, adding, "The people and government of Iraq will be able to neutralise this conspiracy."
Afkham's comments come a day after President Hassan Rouhani said he believed the Iraqis have the capacity to "repel terrorism" and that Iran had not been asked for help by its neighbour.