Iran is using the crisis over Iraq's invasion of Kuwait to end its own isolation and strengthen its own position. A country with so many self-induced problems could hardly be expected to act otherwise. Iran is not on Iraq's side, or against Iraq, but for itself.
First Iraq sought peace with Iran, accepting Iran's terms for the end of their eight-year war, in order to release Iraqi troops to face U.S. and Saudi forces to the south. That was welcome to Iran, allowing it to end its own isolation, retrieve prisoners-of-war and win the dictator Saddam Hussein's recognition of the border, including Iranian sovereignty over the whole Shatt-al-Arab waterway. Iraqi strongman Hussein paid a high price -- his pretext for starting war with Iran in the first place -- to free-up his troops.
Matters have now led to diplomatic recognition. Of course those two countries should recognize each other. But it comes at a time when Iraq, because of militaristic aggression, faces the kind of ostracism that Iran, for its unrelieved Islamic revolution, formerly did. Mutual recognition dilutes the isolation of both countries. Iraq's Foreign Minister Tariq Aziz visited Tehran, seeking a trade route around embargo.