A Security Council resolution would provide a mandate, although so far Russia has blocked attempts to secure strong action on Syria.
He did not believe that Security Council resolution was impossible, despite Russia's power of veto.
"There's a lot of vested interests on the Security Council in Syria, but it's not impossible that position moves as the situation gets worse."
New Zealand has no capacity to take part in the air strikes and Mr Key said even if Australia and other countries such as Britain went further and sent troops in New Zealand would stay away.
"It wouldn't mean anything to New Zealand because we wouldn't join that effort. I think while Australia might hold that view, and others might hold that view it would be a very big call because to do that you get back into the situation you saw in the Iraq War."
He said it might deliver short-term gains but was not a long term solution.
However, he was more vague about whether the SAS would help identify Islamic State targets in Syria for the airstrikes, saying while there was no deployment as such they did move from place to place.
They had helped identify people and targets in Afghanistan: "for the most part we are not doing that in Syria."
He said a deployment was not being considered at the moment and New Zealand was not looking to expand its role beyond the Iraq training mission "at this point."
He said Australia were making a significant financial commitment on the air strikes. "But ultimately they're trying to degrade Isil so people can return there."
Mr Key said the regime of Syrian President Bashar al--Assad was still concern but the more pressing immediate issue was Islamic State, which moved between Iraq and Syria easily.
Mr Key and Mr Abbott met in Port Moresby, where the leaders of the Pacific have gathered for the annual Pacific Islands' Forum leaders' meeting.