British ships and helicopters are "on standby to assist" in the Middle East.
The Defence Secretary confirmed to the House of Commons that the UK is "changing the readiness" of its forces in the region.
Ben Wallace also said "non-essential" British personnel have been relocated from Baghdad to the UK's base in Taji.
The UK is sending a team to Iraq to help the British military contingency plan for every eventuality, including for if personnel need to evacuate the country.
Around 400 British Army personnel are deployed in Iraq across three bases - Camp Taji near Baghdad, Union III in Baghdad, and Erbil in Iraqi Kurdistan.
The UK has a total of seven ships in the Gulf as part of Operation Kipion, comprised of six Navy vessels and one from the Royal Fleet Auxiliary.
Mr Wallace also stated talks are ongoing to establish the implications of a vote by the Iraqi government to expel all foreign forces from the country following the killing of General Soleimani last week in a US air strike.
UK troops had been training Iraqi forces in their fight against so-called Islamic State, until the US-led coalition mission was "paused" several days ago.
Mr Wallace said: "The coalition is in Iraq, at the request of the Iraqi government, to help protect Iraqis and others against the very real threat from Daesh.
"Our commitment to Iraq’s stability and sovereignty is unwavering and we urge the Iraqi Government to ensure the coalition is able to continue our vital work countering this shared threat.
"The main focus of the UK Government is to de-escalate this issue.
"None of us wants conflict."
Cover image: HMS Defender on anti drug operations in the Gulf last month (Picture: MOD).