The UK's role in fighting Islamic State extremists is "strikingly modest" and should be stepped up, MPs have said.
The Defence Select Committee found the UK had carried out 6% of coalition air strikes against the jihadist group and said it was "surprised and deeply concerned" it was not doing more.
But it stressed it was not in favour of deploying combat forces to battle IS.
The government said military action was just part of "comprehensive" action by the international coalition.
In their committee report, the MPs said the "nightmare" of a jihadist state in parts of Iraq and Syria had been realised "in an extreme form".
The MPs suggest the UK could step up its contribution to the air campaign, and perhaps use more special forces.
They also want more effort from the UK to develop its own analysis and strategy, rather than just "sign-up" to the American campaign.
'Boots on the ground'
The MPs said the UK "can and should be playing a greater role" in fighting it, adding that "officials, ministers, and officers have failed to set out a clear military strategy".
In addition, the MPs are calling on the UK to respond to Iraqi requests for more training, including to counter Improvised Explosive Devices (IEDs) and to help restructure the Iraqi Kurdish forces who are taking on IS fighters.
Deputy prime minister Nick Clegg gave a cautious reaction to the report, saying there was "no way we in the UK.. or in the rest of the world altogether will somehow be able to fix the bloodshed in Syria or fix the bloodshed in Iraq" by "charging in".
Speaking on his weekly LBC phone-in Mr Clegg said that in Iraq a reconciliation of the "deep-seated tensions" between Sunni and Shia communities was required.
Mr Clegg said he did not believe the UK's commitment could be measured "according to the number of boots on the ground in Baghdad" but there was role for the UK in seeking to keep IS "in check" in the Middle East.
Analysis by World Affairs Correspondent Nick Childs
The MPs contrast what they see as the level of political rhetoric on the threat posed by IS with the level of effort being put in now to combating it, but also how limited that is relative to the scale of the military campaign last time.
But in Washington and London, officials argue that this is a different kind of enemy this time, and that they have learned the lessons of last time. Hence, for example, a campaign of air strikes that is not on the same scale as previous ones.
There is also an insistence that the air campaign is only a small part of the equation. And there is general agreement that Western combat boots on the ground are not a good idea.
And it is acknowledged that that is partly because of deep public and political reluctance in the West.
IS has taken control of a large number of areas and been behind acts of brutality, including the beheadings of British hostages.
The report said IS was the "most significant threat" to international security to have emerged from the Middle East "in decades".
RAF jets began carrying out combat missions over Iraq in September, after MPs had backed action against IS in that country.
However, Parliament was not asked to vote on military missions against IS in Syria.
The UK's military commitment includes eight Tornado jets, a Reaper drone, transport aircraft and HMS Dauntless, an air defence destroyer.
On a visit to Iraq in December, members of the committee discovered there were only three UK military personnel outside the Kurdish regions of the country, compared with 400 Australians, 280 Italians and 300 Spanish.
They also found there were no UK personnel on the ground with "deep expertise in the tribes, or politics of Iraq".
Committee chairman Rory Stewart said IS had contributed to "the displacement of millions, destabilising and threatening neighbouring states, and providing safe haven to an estimated 20,000 foreign fighters, many dedicated to an international terrorist campaign".
"Yet, the role that the UK is playing in combating it, is strikingly modest," he added.
Speaking to BBC Radio 4's Today programme, he said: "I think it would be a real pity if Britain lurched from engagement to isolation. We must find a way as a global power of playing a responsible role."
The committee said diplomatic involvement with Turkey, Saudi Arabia and Iran should be "significantly increased", adding there was "considerable scope for special forces operations", within legal constraints.
A government spokesman said ministers had been "absolutely clear" on the objectives for Iraq and had set these out in the Commons "on a number of occasions".
"We have carried out the second highest number of air strikes among coalition partners, gifted weapons and trained Iraqi security forces, including the Peshmerga forces, in how to use them, are gifting a further 1,000 counter-IED detectors and are delivering various strategic and skills training programme," he said.
The "comprehensive approach" being taken by the international coalition against IS also included tackling its sources of money and foreign fighters, he added.
The MPs' report comes as a document, posted online by female supporters of IS, describes the role for women within the jihadist group.
The paper, translated into English by UK think tank the Quilliam Foundation, says it is legitimate for girls to be married at the age of nine and that women should be educated from the age of seven to 15 only.
Women, including an estimated 50 from Britain, are believed to account for about 10% of the thousands of foreign recruits to join IS.