I can't see why Iraq is a threat to us either.
I agree spy satellites are not sufficient to determine a threat and it seems like the only reason is Iraq's refusal to allow the UN inspectors in. But does it mean, necessarily, they are building weapons that can threaten us? They could also see this as a violation to their sovereign rights as a nation. But, of course, it's quite suspect and they might just hide something from us.
Can rockets capable of intercontinental range (that's far more than the Scuds) , go completely undetected either by satellites or by aid workers or by any informant on the spot? If we alienate ourselves from them completely, we won't have any mean to know anyway and we will only rely upon rumors or conspiracy theories that we won't be able to verify.

Raoul