Well, add to that the practical problem.
They do not understand one anothers' language.
Only Saddam, the Ayatollah and their intelligence officers need to understand one another.
I'm not suggesting that they're bosom buddies. But I believe they are capable of cooperating in certain sectors, on suitable projects. They don't even need to have joint operations, just a degree of coordination and direction.
For example, could Iran have funded Atta's WTC mission? And might the anthrax have been an extra cost option, courtesy of an Iraqi lab? All with al-Qaeda operating as the prime contractor, having operational control?
I don't believe there is a reason to eliminate either country from suspicion.