In the sense that SA is funding Sunni groups and Iran is funding Shia groups, and in the sense that Operatives from the governments of both parties may be actively involved with the respective groups inside Iraq.

This arms deal is not the US saying 'Gee, we just love and trust them Saudis!', we are attempting to buy the Saudis non-participation in Iraq with weapons (Including advanced satellite guided weapons, like the JDAM!).

The Saudis see the current government of Iraq as an Iranian Proxy. The Saudis national interest, as well as ethnic and religious motivation, is to see that government fall to a strong Sunni government. In as much as the US is trying to support and hold-up the 'Government' of Iraq, the US is acting at cross purposes with Saudi popular and political national will. This arms deal is blood money.

Saudi Arabia sees a proxy war in Iraq, possibly mushrooming into an open struggle with Iran. Saudi Arabia will simply no relinquish its central role in the region without bloodshed. Its a classic historical motivation for war, and as such, a very potent one.

Also- note that you have Musharrif in a lot of trouble in Pakistan as of late, a situation which has deteriorated markedly in just a matter of months- not that it was stable to begin with. You have Musharrif actually in talks with Bhutto- whom he evicted in his military coup- and any alliance with Bhutto, he knows, will not only mean power sharing, but also him vacating his post as the commander of the military- which could mean a powershift in the military towards the extreemist elements who already have a lot of power in the military intelligence circles. Which could set the way for another coup.

Brilliant. What a great geopolitcal position we're in.