The SAS is reported to be on the ground in Iraq, as the US reports seeing fewer civilians trapped on a mountain by Islamic State fighters than previously feared.
The Daily Telegraph reported Baroness Nicholson of Winterbourne, the trade envoy to Iraq, as saying British special forces had been working with US troops for "six weeks or more". A spokesman for the Ministry of Defence said: "We do not comment on UK special forces."
The reports come as David Cameron has been facing pressure to either directly arms Kurds, who are fighting Islamic State jihadis, or to join the US in airstrikes.
Returning from his holiday on Wednesday, Mr Cameron chaired a meeting of the emergency response committee Cobra, and insisted the UK's role would be as a part of a humanitarian mission.
Mr Cameron said: "I can confirm that detailed plans are now being put in place and are under way and that Britain will play a role in delivering them."
On Thursday, Mr Cameron and French President Francois Hollande, whose country has pledged to arm Iraq’s Kurds, said the European Union "could do more" to provide aid to Iraq.
The two leaders said boosting aid for the humanitarian crisis should be addressed when EU foreign ministers meet later on Thursday.
Channel 4 News Foreign Affairs Correspondent Jonathan Rugman has been on the ground in Iraq.Read his blog here.
Britain has sent RAF Tornadoes and on Wednesday said it was sending a small number of Chinook helicopters to Mount Sinjar, where the civilians, most of whom are from the Yazidi minority, are trapped.
The US has been leading rescue effort, sending military advisors to the area.
Troops on the ground
However, US defence secretary Chuck Hagel has cast doubt on the rescue mission after American troops reached the mountain, saying it was far less likely because there were now fewer refugees.
He said US air strikes on Islamic State militants had allowed many people to escape, with some fleeing to a refugee camp in a Kurdish area of Syria.
"As a result of that assessment, I think it's most likely far less likely now that we would undertake any kind of specific humanitarian rescue mission that we have been planning," he said. "That doesn't mean that we won't."
Royal United Services Institute (RUSI) senior research fellow Shashank Joshi said the operation to rescue stranded Yazidis would be simpler if US and UK armed forces were on the ground in Iraq.
He said: "It's easier to neutralise threats, secure landing areas, secure perimeters if you have troops on the ground."
Sexual slavery
On Wednesday the United Nations declared a Level Three Emergency in Iraq, which will trigger additional money and aid to help with the humanitarian crisis there.
UN Special Representative for Iraq Nikolay Mladenov called on the international community to support the Iraqi govenrment and assist in efforts to release women and girls, who are reported to have been abducted by Islamic State militants.
UN Spokesperson Stephane Dujarric told reporters "some 1,500 Yazidi and Christians may have been forced into sexual slavery."
He added "the humanitarian situation of the civilian population on Sinjar is alarming, due to the narrow corridors for transporting essential aid such as medicines, food and water."
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