Interesting. There is genuine merit to both sides. The disagreement does sound largely political, though not for the reason given (Iraq).
It sounds like both sides are trying to keep the site closer to their own political and geographic control.
Personally, I would say that, because of the potential for (terrorist induced) disaster, we should put it farthest from those who are our better friends. IOW: Put it in France.
Build it on the Moon! The He3 is abundant there! Make it work and then beam the energy to Earth. Gene Cernan is one of the Apollo astronauts who has favored this approach!