Holding back from more robust options, President Barack Obama on Thursday said he was dispatching up to 300 military advisers to Iraq to help quell the rising insurgency in the crumbling state.

He called on Iraqi leaders to govern with a more "inclusive agenda" to ensure the country does not descend into civil war.

Obama left open the option of "targeted" military action in the future, and he said the U.S. also would increase its intelligence efforts in Iraq and was prepared to create joint operations centers with Iraqis. But he was adamant that U.S. troops would not be returning to combat in Iraq.

"We do not have the ability to simply solve this problem by sending in tens of thousands of troops and committing the kinds of blood and treasure that has already been expended in Iraq," Obama told reporters in the White House briefing room. "Ultimately, this is something that is going to have to be solved by Iraqis."

US government concerned about Iraqi stability

In the strongest sign yet of U.S. doubts about Iraq's stability, the Obama administration is weighing whether to press the Shiite prime minister in Baghdad to step down in a last-ditch effort to prevent disgruntled Sunnis from igniting a full-scale civil war.

Prior to his statement, the president was meeting with his national security team to discuss how strongly to press Iraqi Prime Minister Nouri al-Maliki to undertake reforms and make his government more inclusive.

Top U.S. officials believe that giving more credence to Sunni concerns about al-Maliki may offer the best opportunity to stave off another deadly round of sectarian fighting of the kind that engulfed Iraq less than a decade ago.

Obama did not publicly call for al-Maliki to resign, instead saying that Iraqis must make their own political decisions. U.S. officials said there was concern within the administration that pushing al-Maliki too hard might stiffen his resolve to stay in office and drive him closer to Iran, which is seeking to keep the Shiite leader in power.

However the administration does want to see evidence of a leadership transition plan being put in place in Iraq.