I vaguely remember Ted Koppel covering Halabja on Nightline. Iran was still a coverage specialization on that show (years after it was the nightly go-to coverage on Iranian hostage crisis.) I was just looking up related things on the net and I found this NYT op-ed from 2003 (which is arguing the hypocrisy of the buildup for the Iraq war) that pretty well summarizes the situation back then. My bold:

Halabja : America didn't seem to mind poison gas
By Joost R. Hiltermann, January 17, 2003

[.....]

There was little love for what virtually all of Washington recognized as an unsavory regime, but Iraq was considered the lesser evil. Sealed by National Security Decision Directive 114 in 1983, the tilt included billions of dollars in loan guarantees and other credits to Iraq.

Sensing correctly that it had carte blanche, Saddam's regime escalated its resort to gas warfare, graduating to ever more lethal agents. Because of the strong Western animus against Iran, few paid heed. Then came Halabja.

Unfortunately for Iraq's sponsors, Iran rushed Western reporters to the blighted town. The horrifying scenes they filmed were presented on primetime television a few days later. Soon Ted Koppel could be seen putting the Iraqi ambassador's feetto the fire on Nightline.

In response, the United States launched the "Iran too" gambit. The story was cooked up in the Pentagon, interviews with the principals show. A newly declassified State Department document demonstrates that U.S. diplomats received instructions to press this line with U.S. allies, and to decline to discuss the details.

It took seven weeks for the UN Security Council to censure the Halabja attack. Even then, its choice of neutral language (condemning the "continued use of chemical weapons in the conflict between the Islamic Republic of Iran and Iraq," and calling on "both sides to refrain from the future use of chemical weapons") diffused the effect of its belated move.

Iraq proceeded to step up its use of gas until the end of the war and even afterward, during the final stage of the Anfal campaign, to devastating effect. When I visited Halabja last spring, the town, razed by successive Iranian and Iraqi occupiers, had been rebuilt, but the physical and psychological wounds remained.

Some of those who engineered the tilt today are back in power in the Bush administration.

They have yet to account for their judgment that it was Iran, not Iraq, that posed the primary threat to the Gulf; for building up Iraq so that it thought it could invade Kuwait and get away with it; for encouraging Iraq's weapons of mass destruction programs by giving the regime a de facto green light on chemical weapons use; and for turning a blind eye to Iraq's worst atrocities, and then lying about it.

[.....]

The thing I remember is the journalists caring and wanting to play Halabja up big. But the majority of the American public didn't care, they still hated Iran, since the hostage crisis, had no sympathy.

And they still don't seem to care much about doing anything about people in the Mideast using chemical weapons on each other.

The Gulf War was supported as Saddam stepping over a line, and it wasn't about chemical weapons. The Iraq war I think, was sold as Saddam stepping over a line again, not obeying the terms of surrender he had agreed to after losing a war and continually pushing the boundaries of Clinton administration policy of no fly-zone and sanctions. Those terms were partly about which weapons he was allowed to have, but despite Condi Rice, Colin Powell et. al. doing the mushroom cloud scare stuff,. I don't think many Americans cared about that as much about that as the stepping over the line thing. Many bought that we had to take a stand against him. Hence, not so much outrage as some might have expected about no WMD's ever being found in the Iraq war.

Edit to add: This news, though, does make it clear that the Gulf War was even more about Saddam being uppity than we previously knew. I.E., they once gave him carte blanch, so all the more reason they had to put their foot down when he stopped following the agreed protocol. And further explains the extraordinary zeal by Bush I people in the Bush II government to "finish the job."