From the beginning of his rise to power, one of Saddam's major objectives was to shift the regional balance of power favorably
towards Iraq. After the 1991 Gulf War, pursuing this objective motivated Saddam and his regime to increase their cooperation
with-and attempts to manipulate-Islamic fundamentalists and related terrorist organizations.
Documents indicate that the regime's us of terrorism was standard practice, although not always successful. From 1991 through
2003, the Saddam regime regarded inspiring, sponsoring, directing, and executing acts of terrorism as an element of state
power.
Iraqi Perspectives Project: Saddam and Terrorism
5 volumes of cataloged and referenced reports on Saddams ties to terrorism. Good reading.
Saddam was a dictator. He wasnt some pansy ass dictator...he ruled with a pretty iron grip and he had a military and the Guard to pretty much do his bidding. Like the Shah, he didnt allow terrorist organizations to plot against the Iraqi government and people...he would have simply made them disappear. So no...it is not likely you will find a group like Al Qaida operating in the borders of a country where the dictator for life would have no problem making their families vanish.
Saudi Arabia handles the terrorist problem in much the same way. UAE handles it a bit differently. In UAE, terror organizations can live, dwell, plan, bank, barbeque...whatever....but they cant ACT within the Emirate.