"We are considering sending fewer than 300," the official said, saying it was in response to a State Department request for additional security personnel.
The request comes amid an intensifying US air campaign against militants in Iraq and follows the murder by Islamic State militants of US journalist James Foley.
IS has threatened to kill a second hostage US journalist, Steven Sotloff, unless US President Barack Obama changes course.
The US military earlier announced it has launched 14 air strikes against IS targets near the Mosul dam since the video of Foley's beheading surfaced Tuesday on the Internet.
The added troops would increase the number of American military personnel in Iraq to around 1,150.
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