Now then Don, I know it might be a little bit difficult, but try reading the whole sentence:

"States like these, and their terrorist allies, constitute an axis of evil, arming to threaten the peace of the world."

Now if he's only referring to an alliance between Iraq, Iran and North Korea, why mention "their terrorist allies"?

"States like these" - Examples given being states such Iraq, Iran or North Korea

Rogue State + Terrorist organisation = Axis of Evil

Perfectly straightforward Don