He said a decision would be months away.
Defence Minister Gerry Brownlee confirmed this morning he had received a letter from US Defence Secretary Ash Carter seeking more resources from the 65 countries engaged in Syria or Iraq to help combat Isis. It was a form letter because it mentioned air strikes, special forces and training.
New Zealand has deployed 143 Defence Force personnel to support a two-year training mission in Camp Taji, just north of Baghdad, in tandem with the Australian Defence Force.
Mr Key, speaking to reporters in Christchurch, said that deployment had been the result of a long and considered process and looked at all the options.
Asked if he might deploy the SAS, he said it was "highly unlikely".
He would not rule anything in or out because it needed to go through a proper process "but it is not where my mindset is, at the moment".
Asked if New Zealand could make a contribution to intelligence, he said "potentially". New Zealand had played an intelligence role in Afghanistan but it would have to be weighed against whether the current contribution was big enough.
"My gut instinct is that it is."
Labour opposed the deployment of trainers to Iraq but defence spokesman Phil Goff implied that it might not oppose a specific request to deploy the SAS if clear conditions were met.
"Firstly, any intervention should be UN sanctioned with an international plan that focuses on dealing with the causes of Isis success.
"That includes isolating Isis and stopping funding to and purchase of oil from it by countries supposedly part of the Coalition which opposes it."
Secondly, there needed to be clear and achievable objective which were likely to be realised.
Third, the level of risk needed to be acceptable before New Zealand personnel were put in harm's way.
Mr Goff, a former Defence Minister, said it was easy to be drawn into conflict,
"Exit strategies are much harder," he said.
