This reads like pure self-serving spin from the Sheikh. The Sheikh had personal demands--that all troops leave Iraq (not just Aussie troops). This was made supposedly after he had arranged a bribe be paid for Wood's release.
So either he was trying to use the Wood case to undermine Allied efforts in Iraq, or else he's lying in telling this story. Or both.
That certainly seems to be a very possible interpretation - there's no doubt that Hilali hoped to use this situation to his political advantage, to promote his agenda - and he is certainly opposed to the war. But it's also clear that there's quite a lot about this that we don't know yet - and personally, consistent with security issues, I hope we do find out eventually.