Saddam Hussein believed we already knew the truth. He had more faith in the US intelligence agencies than they actually deserved.
Saddam conducted a lot of mock drills and communications designed to make it look like they had working nukes. The effort was designed to discourage the Iranians from messing with him. After all, the two nations had fought a war in which one million people were killed, and Iran represented a very grave threat to Iraq.
Unfortunately our intelligence agencies were incompetent and stupid. (Ran by Ivy League Liberals.) We really believed he had working nukes, or was very close to developing them.
Saddam made the mistake of believing we had accurate information.
Iran was, and still is, a much much bigger threat that Saddam could have ever dreamt of being, and we did Iran the biggest favor possible by taking out Saddam.