Deputy Prime Minister Winston Peters has defended the decision to keep New Zealand troops in Iraq, saying New Zealand won't be "cutting and running" in the face of heightening conflict.

Tensions in the region reached boiling point this month, beginning with the death of Iranian general Qassem Soleimani and Iran's subsequent targeting of two US bases in Iraq with ballistic missiles.

On Wednesday, Iran president Hassan Rouhani warned foreign soldiers they "may be in danger" if they don't leave the Middle East.

The danger was brought into harsh focus in New Zealand with news of a rocket attack near Camp Taji where about 45 Kiwi soldiers are stationed in a non-combat training role. No Defence Force personnel were in the vicinity of the attack.

Speaking to RNZ, Peters said the Government was closely monitoring the situation, but was "confident" in continuing the deployment until June.

"We're not cutting and running. We're monitoring the circumstance as carefully as we can and, at this point in time, we do not see a reason to change that level of engagement."

Peters - who is also Foreign affairs Minister - said the government was "super sensitive" to changing circumstances, but had to be careful not to overreact.

"We don't start at shadows," Peters said.

"Having made a commitment, we intend, if we possibly can, to see it through, so that our word internationally is respected."

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The recent "so-called attack" near Camp Taji was not unusual and did not suggest New Zealanders were in increased danger, he said.

"Nothing is business as usual when it comes to these hot spot situations, but [the troops] are as safe as they can be."

New Zealand had remained in constant communication with "all sorts of administrations" about the developing conflict, Peters said.

"We have kept fully informed at every point in time, because we need to know if decisions have to be made at a higher level."

The Government last year announced plans to withdraw from Iraq by June 2020, but the Green Party said the latest developments were evidence New Zealand troops should be pulled out immediately.

Green Party foreign affairs spokesperson Golriz Ghahraman said the actions of both the United States and Iran were "incredibly concerning".

"[Our troops] are in very grave danger now, because the situation has gotten more dangerous with what [US President] Donald Trump has done and now with what the Iranian regime is threatening to do and has already done."

Ghahraman said New Zealand should take heed of the Iraqi Parliament which had moved a motion asking all foreign troops to leave the country.

"The US is famous for always promising to bring democracy to the world," she said.

"Well, now, a democratically-elected parliament has asked us to leave because they feel that we're endangering their nation."