The Iraqis withstood a barrage of Australian attacks on Saturday but came on strong in extra-time before Harry Kewell's 117th minute header crushed their hopes of lifting a second straight continental title.
"In extra-time, we played better than the Australian team. We created chances in this period," the German coach said. "At the end, a good cross and a good header. Hard luck for us, good luck for the Australian team. I think altogether it was a very exciting fight for both teams. Certainly we were disappointed but the way we played was 100 per cent okay."
He added: "Congratulations to my colleague Mr Osieck, I hope he does well and they reach the final."
Iraq, who shocked Asian Cup newcomers Australia 3-1 four years ago in the group stage, have lacked firepower in Doha. They scored just two goals in the group stage when they lost 2-1 to Iran but beat Korea DPR 1-0. They also needed an own goal from the United Arab Emirates to claim another 1-0 win.
Iraq almost opened the scoring on 55 minutes yesterday but Emad Mohammed's right-foot shot zipped past veteran goalkeeper Mark Schwarzer and clattered off the post. They also squandered a crucial chance in extra-time when playmaker Nashat Akram's piercing low drive from the edge of the box flew just wide.
"I think we created our chances by playing football. I must praise my players especially for the last 30 minutes," Sidka said. "We did everything and at the end we had nothing in our hands."
The German mentor also thanked Iraqi supporters who dominated some 9,000 spectators at the 13,500-seat Al Sadd Stadium. "There was a huge crowd of supporters and they were shouting for us. I think my players they needed this and as the match went on, they played more with their heart."
Iraq captain and striker Younis Mahmoud also agreed that luck was on Australia's side on the day "We tried our best but sometimes football is about luck and we didn't have the luck to score from the chances that we created," he told the official Asian Cup website. We played a good game so I don't think that it's too disappointing that we lost."