He was speaking after the Islamist extremists seized control of key cities.
Mr Hague said the situation was of great concern but the Government was "not countenancing at this stage any British military involvement" and believed Baghdad had sufficient domestic forces to counter the threat.
Iraqi Prime Minister Nouri al-Maliki has appealed for help from the international community after militant fighters effectively seized control of the country's second largest city Mosul.
It has been reported they also have control of Saddam Hussein's home city of Tikrit.
Mr Hague said: "We are very worried about this.
"It's very important the civilian population are protected as well as possible, that people who are fleeing the area are looked after by the Iraqi authorities and people in neighbouring countries as well.
"It's for Iraq primarily to respond to this. Iraq has considerable resources. It has its armed forces.
"We're not countenancing at this stage any British military involvement."