gcc 4.0.2: undefined reference to libiconv

[Jim Osborn]

Trying to build gcc 4.0.2 I get this failure in stage 1 of make bootstrap:
  make[1]: Leaving directory `/var/new/gcc-4.0.2-obj/libiberty'
  make[1]: Entering directory `/var/new/gcc-4.0.2-obj/libcpp'
  ...
  libcpp.a(charset.o)(.text+0xb31): In function `convert_using_iconv':
  charset.c: undefined reference to `libiconv'
  ...
  and similar undefined references to libiconv_open and libiconv_close


My config options are:
  --prefix=/usr/local/gcc-4.0.2
  --program-suffix=-4.0.2
  --disable-nls
  --with-libiconv-prefix=/usr/local
  --disable-multilib
  --enable-threads=posix
  --with-cpu=pentium2
  --with-arch=pentium2
  --with-tune=pentium2
  --enable-version-specific-runtime-libs
  --enable-languages=c,c++

My environment:
  gcc 3.4.3
  glibc 2.2.4
  libiconv 1.9.1
  binutils 2.15.94.0.2.2

I'd be grateful for suggestions what to do next.

Jim