Prime Minister John Key says the Government did consider sending the SAS to Iraq after a request from US Defence Secretary Ash Carter but opted against what would have effectively been a combat role.
Mr Carter has thanked the New Zealand Government for agreeing to extend its training deployment to Iraq after Mr Key's announcement yesterday. He also thanked the New Zealand public for what he said was its "staunch support" for the anti-Isis (Islamic State) coalition's efforts.
The decision to extend the deployment by 18 months followed a letter from Mr Carter to New Zealand and the other 65 countries in the anti-Isis coalition requesting more help, including special forces to work alongside Iraqi forces.
Mr Key said it was no secret the US had asked for the SAS, but he opted against it partly because the Iraqi Government did not want it.
"On the ground, combat troops in an advise, assist and accompany role, such as we had in Kabul, is not something the Iraqis want."
Mr Key also hit back at Labour leader Andrew Little's criticism of the decision to extend the deployment, saying New Zealand could not sit back and let other countries do the work.
"If he is going to pull the troops out, then he has to answer the simple question I have to answer as Prime Minister, which is, 'Is it okay for us to do absolutely nothing'," he said.
"It is convenient to say New Zealand should expect every other country to do the heavy lifting, but I don't think it is where New Zealanders are at.
"I don't think as a country ... that most New Zealanders would feel comfortable that we expected the Australians, the Americans, the Brits, the Canadians, the Germans and the French and so many other countries to take sole responsibility of protecting New Zealanders.
"We have to play some part there."
Mr Little said New Zealand should not be involved in training the Iraqi Army because it was ineffective.
He said while there was a case to send the SAS as part of a UN mandated mission, New Zealand was best placed to focus on reconstruction work and peacekeeping.
Mr Key said while there would be a reconstruction role for New Zealand eventually, anything outside a safe base such as Taji was too dangerous at the moment.
He knew he would "take some flak" for going back on his earlier commitment of a two-year deployment, but believed it was necessary.