I'm referring to Ahwaz (thanks); however, if they take Dezful, too, they'll be able to keep the Iranians for reclaiming the city easily (them taking Ahwaz and immediately retreating due to overextension probably won't have the needed effect). Once Dezful has fallen, then's the right time to call for peace talks. Saddam's gotten what he's wanted, after all.
"Or it just might piss of Iranians enough to mobilise more, make people fight harder. Sprinkled with fair dosage of propaganda about Iraqi atrocities..."
If the Iraqis hold Dezful (good military site) and Ahwaz (more oil for Iraq and less for Iran to sell) and poison-gas to death the human waves of fanatics Khomeini will send, all the popular opinion in Iran won't mean diddly. All Iraq will need to do after seizing the two sites is fight defensively until Iran exhausts itself.
"The problem is can Iraq keep this gains without peace treaty? Taking it is one thing, keeping it on the end of long supply line, with IRIAF bombing your supply routes, with constant attacks on flanks...."
If these two sites fall, could Iraq exploit the "military momentum" to secure the flanks, and keep the Iranians off long enough to improve their supply lines? If so, yes; if not, then it's up in the air.
"I doubt Saudis and US would be thrilled with prospect of this. OTOH, they might not be thrilled strong Saddam with regional ambitions as well."
What if the US decides that a popular broad-based state is more likely to be a stable ally in the region rather than a dictatorship (the apply the Shah's example to Saddam) and ally with the Shi'ites? They're just as good an oil source as Saudi Arabia, esp. if the US arm-twists the Shi'ites into renouncing all claims to the Hasa and arm-twists the Saudis into not oppressing the Shi'ites as much?
Also, if the US is afraid of Saddam, couldn't they wait until Saddam's control over Shi'ite Arabistan starts to slip and then aid the Shi'ite rebels? Iran's been screwed over by the war and if Saddam's out of the way, no strong and antagonistic state to threaten the flows of oil.
Of course, if the US doesn't do this and continues aid to Saudi Arabia (and Saddam if needed), Shi'ite Arabs could be this TL's equivalent of the Kurds, oppressed by many nations and lacking a homeland of their own. You have a good point.