Defence Minister Gerry Brownlee says there may be Islamic State cells in the vicinity of Camp Taji, where New Zealand forces are stationed in Iraq.
But Mr Brownlee, who recently visited the troops in Iraq, told TVNZ's Q and A programme this morning he was confident about the safety of the New Zealand forces.
He said they were good at intelligence-gathering, and the military base was patrolled and secure.
"Their accommodation is units that are underneath two feet of concrete up above them, so that would protect them in that event.
"And as they move around the base they do carry personal weapons and there is, of course, all of the patrols around there as well."
Mr Brownlee also defended Iraqi troops, saying New Zealand First MP Ron Mark was unfair to call them cowards after IS captured the city of Ramadi last month.
Mr Brownlee said Iraqi troops were courageous and determined.