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The US also disliked Iraqi support for many Arab and Palestinian militant groups such as Abu Nidal, which led to Iraq's inclusion on the developing US list of State Sponsors of Terrorism on 29 December 1979.The US remained officially neutral after Iraq's invasion of Iran in 1980, which became the Iran–Iraq War, although it provided resources, political support, and some "non-military" aircraft to Iraq.

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Most of the coalition states used various names for their operations and the war's operational phases.When Iraqi President Saddam Hussein expelled Abu Nidal to Syria at the US's request in November 1983, the Reagan administration sent Donald Rumsfeld to meet Saddam as a special envoy and to cultivate ties.By the time the ceasefire with Iran was signed in August 1988, Iraq was heavily debt-ridden and tensions within society were rising.The United Arab Emirates and Kuwait were consistently overproducing; the latter at least in part to repair losses caused by Iranian attacks in the Iran–Iraq War and to pay for the losses of an economic scandal.The result was a slump in the oil price – as low as $10 a barrel – with a resulting loss of $7 billion a year to Iraq, equal to its 1989 balance of payments deficit.Its ruling dynasty, the al-Sabah family, had concluded a protectorate agreement in 1899 that assigned responsibility for its foreign affairs to the United Kingdom.

The UK drew the border between the two countries in 1922, making Iraq virtually landlocked.

At the same time, Saddam looked for closer ties with those Arab states that had supported Iraq in the war.

This was supported by the US, who believed that Iraqi ties with pro-Western Gulf states would help bring and maintain Iraq inside the US' sphere of influence.

In 1989, it appeared that Saudi–Iraqi relations, strong during the war, would be maintained.

A pact of non-interference and non-aggression was signed between the countries, followed by a Kuwaiti-Iraqi deal for Iraq to supply Kuwait with water for drinking and irrigation, although a request for Kuwait to lease Iraq Umm Qasr was rejected.

The war is also known under other names, such as the Persian Gulf War, First Gulf War, Gulf War I, Kuwait War, First Iraq War or Iraq War, The Iraqi Army's occupation of Kuwait that began 2 August 1990 was met with international condemnation and brought immediate economic sanctions against Iraq by members of the UN Security Council.