As the backlash intensifies from Iraq and Turkey over a controversial Kurdish independence referendum, Australia hopes the saga won't distract from efforts to fight IS militants.
Last week there was 92 per cent yes vote among the four million Kurds who participated in the poll in the autonomous region in northern Iraq.
Iraq's central government has in protest ordered international airlines to halt flights to and from the cities of cities Irbil and Sulaymaniyah.
Turkey has threatened restrictions on oil trading with Iraqi Kurds and has stopped training Kurdish peshmerga forces, who have been fighting IS.
Kurdish officials say they can withstand an economic blockade because they are self-sufficient in terms of power generation and fuel supply and have fertile agricultural land.
A spokesman for Australian foreign affairs department called for calm.
"IS remains a serious threat to Iraq and it is essential Erbil and Baghdad continue to work together to defeat it," the spokesman told AAP.
"It is important and necessary that the Iraqi government and Kurdish leaders work together to avoid further instability and conflict in the country and resolve differences in a manner that maintains national cohesion."
US Secretary of State Rex Tillerson said America doesn't recognise the Kurdistan regional government's unilateral referendum.
"The vote and the results lack legitimacy and we continue to support a united, federal, democratic and prosperous Iraq," he said in a statement.
Iraq's Kurds have a long-held dream of statehood.
They were brutally oppressed under dictator Saddam Hussein, whose military in the 1980s killed at least 50,000 of them, many with chemical weapons.
Australia has six Super Hornets conducting air strikes against IS across Iraq and Syria, along with an air-to-air refuelling tanker and Wedgetail early warning and control aircraft.
Commander of Australia's Air Task Group Terry van Haren likens the coalition air power fighting IS to the precision of surgeons cutting out cancer.
"But it requires the body to cure the disease - the Iraqis are the chemo, it has to be cured by them," he told AAP in the Middle East.
He said it was important for the "politics to become settled" for country's long-term security.
Meanwhile, overnight, it emerged an Australian Super Hornet had conducted an air strike in June that may have accidentally killed a child.
And in a separate incident in March, Australian defence personnel had been involved in approving an air strike which may have killed seven civilians including a child.
