The US says it is unlikely to launch a mission to evacuate Iraqis trapped by Islamist fighters on Mount Sinjar.
A Special Forces team flew to the mountain and found fewer people than expected, and those remaining were also in a better condition than feared, the Pentagon said.
The US has sent hundreds of military advisers to Iraq to help people fleeing militant group Islamic State (IS).
IS fighters have seized large swathes of northern Iraq in recent months.
The UN had estimated that tens of thousands of people, most from religious minorities, were besieged on the mountain after being forced to flee their homes.
Members of the Yazidi sect are among those stranded on Mount Sinjar.
However, in a statement, the Pentagon said there were now "far fewer Yazidis on Mount Sinjar than previously feared", partly because thousands had evacuated from the mountain each night over the past days.
"The Yazidis who remain are in better condition than previously believed and continue to have access to the food and water that we have dropped," the statement said.
"Based on this assessment... an evacuation mission is far less likely."
The statement added that the US would continue to provide humanitarian assistance.
Wednesday's operation had been focused on assessing whether to try to evacuate those trapped on the mountain.
Earlier, the US had said it was considering airlifts and the creation of safe passages for fleeing civilians - but insisted no US ground forces would be in a combat role.
On Wednesday, the UN declared the Iraq crisis a "level three emergency", its highest level of humanitarian crisis.
Planes have been dropping aid supplies on Mount Sinjar for several nights.
The US said it conducted its seventh air-drop of food and water on Wednesday, and had delivered more than 114,000 meals and 35,000 gallons (160,000 litres) of drinking water to those trapped.
The US has also continued to conduct air strikes on IS targets in Iraq's north.
France says it will arm Iraq's Kurds, who are already getting US military aid to fight IS. Meanwhile, the UK has pledged to join a rescue mission for displaced civilians.
The UN estimates that 1.2 million Iraqis have been internally displaced by the crisis.
Kurdish officials in the province of Dohuk told the BBC's Frank Gardner that about 150,000 refugees in the area, overwhelming the local population who were trying to feed them.
The rapid advance across Iraq by IS militant fighters has thrown the country into chaos.
IS overran Iraq's second largest city, Mosul, in June. Its fighters had taken the central city of Falluja and parts of nearby Ramadi in December 2013.
On 29 June, IS said it had created a caliphate, or Islamic state, stretching from Aleppo in Syria to the province of Diyala in Iraq.
The jihadist group, previously called Islamic State in Iraq and the Levant (Isis), was formed in April 2013, growing out of al-Qaeda in Iraq.
The group has gained a reputation for brutal rule in the areas that it controls, and has since been disavowed by al-Qaeda.
It is one of the main jihadist groups fighting government forces in Syria and Iraq.