[Sonny M]

He also knew exactly what Saddam would do with satelite images of Iranian troops (ie. burn then up with chemical weapons).

From what I read, Reagan thought Saddam was going to bomb the living heck out of them, no one thought he would actually use chemical weapons (for any reason, even tactically, they aren't the best choice).

When Saddam did, everybody was stunned.

[Cronos]

I agree. I don't think Reagan condoned the use of chemical weapons by Saddam.