US Secretary of State John Kerry has vowed “intense and sustained support” for Iraq after meeting key politicians in the capital, Baghdad.
He said attacks by Sunni militants were a threat to Iraq’s existence, and the next days and weeks would be critical.
The insurgents are expanding their control of towns in the north and west.
They are bearing down on a vital dam near Haditha, and have captured all of the border crossings to Syria and Jordan from government forces.
The key airport in the northern town of Tal Afar has also fallen, with some reports saying the town itself has been captured.
Heavily armed Iraqi troops are protecting the dam near Haditha. Its destruction would damage the nation’s electricity grid. Residents told BBC Arabic that rebels had surrounded the town but had not yet entered it.
An Iraqi military spokesman said that hundreds of Iraqi soldiers had been killed by Sunni Arab militants in the offensive that began with the capture of the second city of Mosul on 9 June.
On Monday Mr Kerry met Iraqi Prime Minister Nouri Maliki to discuss the crisis and also held talks with key Shia and Sunni figures.
The secretary of state said later at the US embassy: “The support will be intense, sustained, and if Iraq’s leaders take the steps needed to bring the country together it will be effective.”
He said the US support would “allow Iraqi security forces to confront [Isis] more effectively and in a way that respects Iraq’s sovereignty”.
Mr Kerry said Iraq’s leaders faced a “moment of decision”.
He said: “Iraq faces an existential threat and Iraq’s leaders have to meet that threat. The very future of Iraq depends on choices that will be made in the next days and weeks and the future of Iraq depends primarily on the ability of Iraq’s leaders to come together and take a stand, united against [Isis]. Not next week, not next month, but now.”
Mr Kerry said that Mr Maliki had reaffirmed his commitment to forming a new government by 1 July, but added that no country had the right to tell Iraqis who should lead them.
“That’s up to the people of Iraq,” he said.
Correspondents say the US has been pressing for a more inclusive government, with greater representation for minority Sunnis.
A statement from Mr Maliki’s office after the Kerry meeting said the crisis in Iraq represented “a threat not only to Iraq but to regional and international peace”.
The BBC’s Richard Galpin in Baghdad says there was no sign of the US agreeing to what the Iraqi leaders really want – air strikes on the insurgents.
The US, which pulled out of Iraq in 2011, has already announced it is deploying some 300 military advisers to Iraq to help in the fight against the insurgents.
However, neighbouring Iran has opposed greater US intervention. Supreme Leader Ayatollah Ali Khamenei accused Washington of “seeking an Iraq under its hegemony and ruled by its stooges”.
The rebels of the Islamic State in Iraq and the Levant (Isis) have now taken three key border crossings in Anbar province that link Iraq to Jordan and Syria.
The capture of the Syria crossings could help Isis transport weapons and other equipment to different battlefields, analysts say.
Police sources also told the BBC that 70 prisoners had been killed near the city of Hillah, south of Baghdad.
The prisoners, who were all accused of terrorism, were being moved further south for security reasons when the convoy came under attack by gunmen.
They were killed in the crossfire. Several policemen were injured and six of the gunmen were shot dead, police said.