"[But] there are many situations around the world where there are real issues, the question is how we can best contain [them] and potentially ensure that they desist from their activities."
Pushed on whether a military response was morally right, Mr Key said: "On balance I would say yes, but that doesn't mean that we would actually do that.
"If you go and look in Iraq, what we see in Iraq is basically a situation where, a, the Iraqi government in asking for help, [so] you're not doing something against the will of the people, and secondly, the actions that these people are undertaking - everything from public beheadings to the actions against innocent civilians - then it's morally reprehensible.
"I think the question is would a military response from New Zealand play both a useful part and be worth what we're doing."
He was likely to make a decision "within the next few weeks", he said.