American support for Ba'athist Iraq during the Iran–Iraq War, in which it fought against post-revolutionary Iran, included several billion dollars' worth of economic aid, the sale of dual-use technology, military intelligence, and special operations training. The U.S. refused to sell arms to Iraq directly due to Iraq's ties to terrorist groups, but several sales of "dual-use" technology have been documented; notably, Iraq purchased 45 Bell helicopters for $200 million in 1985. Of particular interest for contemporary Iran–United States relations are accusations that the U.S. government actively encouraged Iraqi leader Saddam Hussein to invade Iran (proponents of this theory frequently describe the U.S. as having given Saddam a green-light), supported by a considerable amount of circumstantial evidence and generally regarded as the conventional wisdom in the Arab world, but several scholars and former U.S. government officials deny that any such collusion occurred, and no direct documentary proof of it has been found.
U.S. government support for Iraq was not a secret and was frequently discussed in open sessions of the Senate and House of Representatives. On June 9, 1992, Ted Koppel reported on ABC's Nightline that the "Reagan/Bush administrations permitted—and frequently encouraged—the flow of money, agricultural credits, dual-use technology, chemicals, and weapons to Iraq."
American views toward Iraq were not enthusiastically supportive in its conflict with Iran, and activity in assistance was largely to prevent an Iranian victory. This was encapsulated by Henry Kissinger when he remarked, "It's a pity they both can't lose."
U.S. reaction to the conflict
Following the Iranian Revolution, the Carter administration continued to see Iran as a bulwark against Iraq and the Soviet Union, and therefore attempted to forge a strategic partnership with the new Interim Government of Iran under Prime Minister Mehdi Bazargan. Chargé d'affaires at the American embassy in Tehran Bruce Laingen realized that Iranian officials were acutely interested in U.S. intelligence on Iraq, and convinced Assistant Secretary of State for Near Eastern Affairs Harold H. Saunders to approve an intelligence-sharing liaison with the Iranian government, culminating in an October 15, 1979 meeting between longtime Central Intelligence Agency (CIA) officer George W. Cave and the Iranian Deputy Prime Minister Abbas Amir-Entezam and Foreign Minister Ebrahim Yazdi. Cave told Mark J. Gasiorowski that he briefed Entezam and Yazdi on Iraqi military preparations and covert operations seemingly designed to facilitate a large-scale invasion of Iran, although no final decision had been made. (The content of Cave's briefing was corroborated by Laingen, Yazdi, Entezam, and Bazargan.) In particular, echoing a March 1979 warning from Pentagon analyst Howard Teicher regarding Iraqi designs on Iran's oil-rich Khuzestan province, Cave pointed out that Iraq had created a front organization that could instigate unrest among Khuzestan's majority–Arab inhabitants—yet Cave emphasized that war could still be avoided if the strength of Iran's armed forces did not continue its post-revolutionary decline. Furthermore, Cave urged his Iranian interlocutors to monitor the movement of Iraqi troops using the CIA-built IBEX systems from the reign of the Shah. Although Teicher and Cave's predictions proved accurate, they were the product of circumstantial evidence disputed internally within the U.S. government, and the significance of Cave's briefing has been debated. For example, according to Bureau of Intelligence and Research (INR) analyst Wayne White, who was not aware of the intelligence that informed Cave's briefing: "The Iraqi army was doing little more than continuing its well-known annual schedule of primarily battalion and brigade-level training exercises ... Very little of the Iraqi military was anywhere near the Iraqi-Iranian frontier." Similarly, the head of the Iran desk at the State Department, Henry Precht, stated: "I had no impression at the time that anyone believed Iraq was planning a major attack although we thought that [Iraqi President] Saddam [Hussein] might be stirring up the Kurds. At the time I did not think he would take on his larger and still probably more potent neighbor." On the other hand, Gasiorowski contended that "If Iran's leaders had acted on the information provided in Cave's briefings ... the brutal eight–year [Iran–Iraq War] might never have occurred."