Shaking Hands with Saddam Hussein
The Iran-Iraq war (1980-1988) was one of a series of crises during an era of upheaval in the Middle East: revolution in Iran, occupation of the U.S. embassy in Tehran by militant students, invasion of the Great Mosque in Mecca by anti-royalist Islamicists, the Soviet Union's occupation of Afghanistan, and internecine fighting among Syrians, Israelis, and Palestinians in Lebanon. The war followed months of rising tension between the Iranian Islamic republic and secular nationalist Iraq. In mid-September 1980 Iraq attacked, in the mistaken belief that Iranian political disarray would guarantee a quick victory.

The international community responded with U.N. Security Council resolutions calling for a ceasefire and for all member states to refrain from actions contributing in any way to the conflict's continuation. The Soviets, opposing the war, cut off arms exports to Iran and to Iraq, its ally under a 1972 treaty (arms deliveries resumed in 1982). The U.S. had already ended, when the shah fell, previously massive military sales to Iran. In 1980 the U.S. broke off diplomatic relations with Iran because of the Tehran embassy hostage crisis; Iraq had broken off ties with the U.S. during the 1967 Arab-Israeli war.

The U.S. was officially neutral regarding the Iran-Iraq war, and claimed that it armed neither side. Iran depended on U.S.-origin weapons, however, and sought them from Israel, Europe, Asia, and South America. Iraq started the war with a large Soviet-supplied arsenal, but needed additional weaponry as the conflict wore on.

Initially, Iraq advanced far into Iranian territory, but was driven back within months. By mid-1982, Iraq was on the defensive against Iranian human-wave attacks. The U.S., having decided that an Iranian victory would not serve its interests, began supporting Iraq: measures already underway to upgrade U.S.-Iraq relations were accelerated, high-level officials exchanged visits, and in February 1982 the State Department removed Iraq from its list of states supporting international terrorism. (It had been included several years earlier because of ties with several Palestinian nationalist groups, not Islamicists sharing the worldview of al-Qaeda. Activism by Iraq's main Shiite Islamicist opposition group, al-Dawa, was a major factor precipitating the war -- stirred by Iran's Islamic revolution, its endeavors included the attempted assassination of Iraqi Foreign Minister Tariq Aziz.)

Prolonging the war was phenomenally expensive. Iraq received massive external financial support from the Gulf states, and assistance through loan programs from the U.S. The White House and State Department pressured the Export-Import Bank to provide Iraq with financing, to enhance its credit standing and enable it to obtain loans from other international financial institutions. The U.S. Agriculture Department provided taxpayer-guaranteed loans for purchases of American commodities, to the satisfaction of U.S. grain exporters.

The U.S. restored formal relations with Iraq in November 1984, but the U.S. had begun, several years earlier, to provide it with intelligence and military support (in secret and contrary to this country's official neutrality) in accordance with policy directives from President Ronald Reagan. These were prepared pursuant to his March 1982 National Security Study Memorandum (NSSM 4-82) asking for a review of U.S. policy toward the Middle East.

One of these directives from Reagan, National Security Decision Directive (NSDD) 99, signed on July 12, 1983, is available only in a highly redacted version [Document 21] (http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB82/iraq21.pdf). It reviews U.S. regional interests in the Middle East and South Asia, and U.S. objectives, including peace between Israel and the Arabs, resolution of other regional conflicts, and economic and military improvements, "to strengthen regional stability." It deals with threats to the U.S., strategic planning, cooperation with other countries, including the Arab states, and plans for action. An interdepartmental review of the implications of shifting policy in favor of Iraq was conducted following promulgation of the directive.

By the summer of 1983 Iran had been reporting Iraqi use of using chemical weapons for some time. The Geneva protocol requires that the international community respond to chemical warfare, but a diplomatically isolated Iran received only a muted response to its complaints [Note 1]. It intensified its accusations in October 1983, however, and in November asked for a United Nations Security Council investigation.…
http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB82/