He said the United States wants to do more in the fight and is "only limited by our own ingenuity" and ideas. Carter expressed confidence that the White House will approve recommendations, saying nothing he has asked President Barack Obama for yet in the conflicts has been turned down.
Carter spoke to reporters at Al-Dhafra Air Base near Abu Dhabi, an important launching point for military operations against the Islamic State group in the region.
Carter suggested the US may consider shifting the nature of its military campaign against the extremists, adding there could be more rapid targeting of the enemy as intelligence on the ground improves.
"As we've learned more and are more on top of the enemy, you can do more dynamic targeting," Carter said.
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Late last month, US Gen Joseph Dunford, chairman of the Joint Chiefs of Staff, told reporters that he and Carter believe there will be an increase in US forces in Iraq in the coming weeks. Any final decision would be worked out with the Iraqi government and require Obama's approval.
The Pentagon says there are close to 3,400 US troops there now. According to US officials, however, there are actually as many as 5,000 American forces in the country, but some do not count against the cap because they are in Iraq on temporary duty.
Dunford and Carter have said that accelerating the fight against US could mean using Apache helicopters for combat missions, deploying more US special operations forces or using American military advisers in Iraqi units closer to the front lines.
Carter has said that Obama and other US leaders will encourage other Gulf nations to contribute economically to the effort to rebuild Iraq once IS is defeated.