Of course Iraq was a terrorist state. It was a fascist Baath Party affair, just as Syria and Egypt are today. Although billions in foreign aid have bought the Mubarak gov't (for the time being, anyhow), Syria is far more belligerent, and always has been.
Now, Iran is stirring the pot. The most basic thing we could accomplish right now is cutting the Iran to Syria supply pipeline to Hezbollah, which unless some inbred goat poker has invented the mass/energy transporter, must either be going through northern Iraq and/or Turkey. One area we supposedly control and the other is one of our Islamic "allies".
That is what they are. Good one.
I believe the primary supply lines between Iran and Syria, thence to Hezbollah, are via air and sea.