It comes amid intense sabre-rattling by US President Donald Trump and his Iranian counterpart Hassan Rouhani.
The ABC has been told Australian defence facilities would likely play a role in identifying targets in Iran, as would British intelligence agencies.
But a senior security source emphasised there was a big difference between providing accurate intelligence and analysis on Iran's facilities and being part of a "kinetic" mission.
"Developing a picture is very different to actually participating in a strike," the source said.
"Providing intelligence and understanding as to what is happening on the ground so that the Government and allied governments are fully informed to make decisions is different to active targeting."
Prime Minister Malcolm Turnbull said this morning he had no reason to believe the US was preparing for a military confrontation.
"President Trump has made his views very clear to the whole world, but this story … has not benefited from any consultation with me, the Foreign Minister, the Defence Minister or the Chief of the Defence Force," he said.
The top-secret Pine Gap joint defence facility in the Northern Territory is considered crucial among the so-called "Five Eyes" intelligence partners — the US, UK, Australia, Canada and New Zealand — for its role in directing American spy satellites.
Analysts from the little-known spy agency Australian Geospatial-Intelligence Organisation would also be expected to play a part.
Canada would be unlikely to play a role in any military action in Iran, nor would the smallest Five Eyes security partner New Zealand, sources said.
Iran is a signatory to international agreements such as the Non-Proliferation Treaty and is not known to currently possess any weapons of mass destruction, but Mr Rouhani has recently boasted his nation's nuclear industry is advancing at a fast pace.
Last month Iran's nuclear chief opened a new nuclear enrichment facility that he said would comply with the nuclear deal Tehran signed with world powers in 2015.
Middle East braces for Trump[Middle East braces for Trump]
As Israel faces off against Iran and its proxies in the Middle East, all eyes are on Donald Trump's next move.Any US-led strike on Iranian targets would be fraught for a region bristling with tensions. Israel would have reason to be anxious about retaliation, given Iran rejects Israel's right to exist.
That said, Israel's Prime Minister Benjamin Netanyahu in April invoked the so-called "Begin Doctrine" that calls on the Jewish state to ensure nations hostile to Israel be prevented from developing a nuclear weapons capability.
"Israel will not allow regimes that seek our annihilation to acquire nuclear weapons," Mr Netanyahu said.
An Australian Government source said when it came to Iran, Australia relied on intelligence sourced from its Five Eyes partners, not Israel.
Government split on whether Trump's tweets are real threats
While some in the Turnbull Government firmly believe Mr Trump is prepared to use military force against Iran, others maintain it might be more bluster, given the consequence of conflict with Tehran might include unpredictable, dangerous responses in the Middle East.
Earlier this week, Mr Trump fired off an all-caps tweet directed at the Iranian President, seemingly warning of war:
He was responding to Mr Rouhani, who was quoted telling Iranian diplomats: "America should know that peace with Iran is the mother of all peace and war with Iran is the mother of all wars.
"Do not play with the lion's tail or else you will regret it," he said.
Mr Trump has since adjusted his rhetoric, suggesting Washington is ready to go back to the negotiating table with Tehran for a new nuclear deal.
"I withdrew the United States from the horrible one-sided Iran nuclear deal, and Iran is not the same country anymore," he told a convention in Kansas City.
"We're ready to make a deal."
Grappling with whether Mr Trump's Twitter missives should be believed has become a global quest — and not just his tweets about Iran or North Korea.
In response to the US President's all-caps tweet on Monday, a high-ranking Iranian army official told the ISNA news agency, a Tehran Government mouthpiece, that Mr Trump's threats were merely "psychological warfare".
General Gholam Hossein Gheibparvar, the chief of the paramilitary Revolutionary Guard's volunteer Basij force, said Mr Trump "won't dare" take military action against Iran.
It was an assessment echoed by Iranian MP Heshmatollah Falahatpisheh, who told Associated Press he doubted the escalating rhetoric would lead to a military confrontation.
Australia is urging Iran to be a force for peace: Bishop
Foreign Minister Julie Bishop has emphasised diplomatic efforts to bring Iran to heel.
"Australia is urging Iran to be a force for peace and stability in the region," she told ABC's AM program on Thursday.
"The relationship between the United States and Iran is a matter for them.
"What we are looking to do is to ensure that all parties embrace peaceful and stable principles to ensure that our region is safe."
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