The plan, drawn up over recent days by the Pentagon, was endorsed by the President during an emergency meeting of his national security team in the White House earlier today. The Special Forces personnel would be deployed in groups at various Iraqi Army brigade headquarters around the country.
Mr Obama, who came to office on a pledge to withdraw the US from Iraq - a process he completed when the last US soldiers left in 2011 - insisted they would be there in an advisory role only and would not engage in combat. The US has watched in dismay as the Iraqi military appeared virtually to crumble in the face of the rebel advances.
Nonetheless, his decision will stir intense controversy at home given that he has repeatedly ruled out boots on the ground over recent days. Even as the crisis in Iraq has burgeoned, sentiment on Capitol Hill has been running strongly against the US becoming involved once more in a sectarian struggle that it may not be able to influence. Should any of these personnel find themselves fired upon they would fire back.
The deployment of the Special Forces, which would be likely to include Navy Seal specialists, Army Rangers and Green Berets, comes on top of an earlier decision to send roughly 270 personnel to Iraq to beef up protection of US assets in the country, notably the embassy in Baghdad, the biggest US diplomatic complex anywhere in the world.
While the Iraqi government has publicly appealed for US air strikes against the insurgents, there has so far been no decision to grant that request or much appetite to, in part because of difficulty in collecting the intelligence accurately to identify suitable targets. Mr Obama has also made clear he would expect the Prime Minister Nouri al-Maliki to move first towards forging political reconciliation with Sunni and Kurdish elements brought into government.
Officials in Washington confirmed that the US is already flying fighter jets from an aircraft carrier in the Gulf over Iraqi territory to help gather intelligence about the size and speed of the advance by rebel fighters, most of them tied to Isis, an al-Qa'ida splinter group. They have also acknowledged conversations with Iran about the crisis.
In an interview with NBC News, the Secretary of State, John Kerry, insisted that the contacts with Iran were limited in scope and were not intended to lead to any kind of military co-ordination in Iraq. 'We are interested in communicating with Iran,' he said. 'That the Iranians know what we're thinking, that we know what they're thinking and there is a sharing of information so people aren't making mistakes.'
The notion of a rapprochement between Iran and the US triggered by the Iraqi insurgency has rung alarm bells among some of America's traditional allies in the region, notably Saudi Arabia. The Sunni-led kingdom considers the Shia regime in Iran as its greatest foe.
That dismay was reflected in a statement released by the Saudi embassy in London. It said Riyadh opposed 'all foreign intervention and interference in the internal affairs of Iraq. Instead, we urge all the people of Iraq, whatever their religious denominations, to unite to overcome the current threats and challenges facing the country.'
Mr Kerry meanwhile played down reports that the US is actively considering asking Mr Maliki to step down as Prime Minister. 'What the United States is doing is about Iraq, it's not about Maliki. Nothing the President decides to do is going to be focused specifically on Prime Minister Maliki. It is focused on the people of Iraq,' he said.
Among those on Capitol Hill giving voice to worries about even a modest deployment of Special Forces was the House Democratic Leader Nancy Pelosi. 'I think that you have to be careful sending Special Forces because that's a number that has a tendency to grow. And so I'd like to see the context, purpose, time line and all the rest for anything like that,' she said.
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