Defence announced on Thursday that a Super Hornet fighter had dropped two bombs on a militant "facility" overnight in a significant escalation of Australia's involvement in the war against the militant group also known as ISIL. It is the first time the RAAF has fired on an enemy since the Iraq war of 2003.

Sources told Fairfax Media the target was a building that was being used by the militant group as a "command and control" centre. It was in an isolated spot away from built-up areas, it is understood.

"Overnight the Australian Air Task Group operating in the Middle East attacked its first target in Iraq," the Defence statement said.

"Two bombs were dropped from an F/A-18F Super Hornet on to an ISIL facility. All aircraft exited the target area safely and returned to base."

It is unclear how many people were killed in the air strike.

This was the first time that Australian fighters have actually launched an attack, though it was the fourth combat mission flown by the Super Hornets.

Defence chiefs revealed on Wednesday that Super Hornets pulled out of a potential strike on a moving Islamic State target in Iraq on Sunday night because of fears of killing civilians.

The weapons dropped on the Islamic State target would either have been 500-pound GBU-12 laser-guided bombs or JDAM (joint direct attack munition) bombs which are directed by GPS and come in 500-pound and 2000-pound versions.

Both types of weapons have similarly high levels of accuracy with an error margin of only about one metre.

The Chief of the Defence Force, Air Chief Marshal Mark Binskin, said on Wednesday that the air campaign, though still in its early stages, was working.

"Air (power) stops forces like ISIL amassing on the battlefield and taking ground and having the freedom of manoeuvre," he said. "They understand if they start to move in groups in the open, they will die."

But the next part of the strategy – which experts agree will be the more difficult phase – involves bolstering the Iraqi and Kurdish forces on the ground so they are able to drive the Islamic State out of its strongholds.

Up to 200 Australian commandos and support personnel will soon be deployed to Iraq to "advise and assist" the Iraqi military.

Air Chief Marshal Binskin has said the air strikes were giving the Iraqi military time to "rebuild" and take back territory.

But he said that getting the Iraqi army – which suffered some catastrophic defeats at the hands of the Islamic State in recent months – up to scratch will take months rather than weeks.

He will attend a meeting in the US next week of coalition military leaders to firm up plans for rebuilding the Iraqi military.

Rather than flying bombing raids against fixed targets, they are providing cover for Iraqi forces on the ground, either as "close air support" during battles against the militants or as "air interdiction" in which they attack Islamic State targets ahead of battles.