Nick Clegg says British air strikes on Islamic State militants would have to be a part of a "jigsaw of other measures" led by countries in the region.
The Deputy Prime Minister told BBC News: "Air strikes on their own - particularly if they are deemed to be air strikes by the West against the rest - don't work.
"We can only act in support of those countries that are on the front line against this terrible menace of Isil - the legitimate government in Baghdad, the legitimate authorities in the Kurdish northern part of Iraq," he said.
Mr Clegg added: "As long as we can work in concert with other countries and in support of other countries, then we should not rule out Britain continuing to play an active role in trying to ... squeeze out of existence this medieval and vile movement."
I've been told at the Nato summit that the intelligence services know exactly who 'Jihadi John' is - or at least are 99.9% certain.
The British aid worker being held by Islamic State is David Haines, a 44-year-old father-of-two from Perth, Scotland.
In a video statement which claims to record his final words US hostage and journalist Steven Sotloff blames US foreign policy for his death.