One idea I have is to place a transparent element (like a div) in front of your iframe and then intercept the click and mouse move events there to make the iframe drag around.
I've done so here in this plunker.
The code, as you see below, is just enough to get across this idea and what steps are required to get the iframe to move around. It has some flaws (move your mouse quickly) but you could do some things to resolve those issues.
<!DOCTYPE html>
<html>
<head>
<style>
iframe, div {
position: absolute;
left: 20px;
top: 20px;
width: 200px;
height: 200px;
}
</style>
</head>
<body>
<iframe id="iframe" src="if.html"></iframe>
<div id="div" onmousedown="startDrag(event)" onmouseup="stopDrag()" onmousemove="moveDrag(event)"></div>
</body>
<script>
var objDiv = document.getElementById("div");
var objDivCoordinates = {left: 20, top: 20};
var objIframe = document.getElementById("iframe");
var mouseX = null;
var mouseY = null;
var dragging = false;
function startDrag(e) {
mouseX = e.clientX;
mouseY = e.clientY;
dragging = true;
objIframe.contentWindow.document.writeln("Starting Drag...<br>");
}
function moveDrag(e) {
if(!dragging) return;
var changeX = mouseX - e.clientX;
var changeY = mouseY - e.clientY;
objDivCoordinates.left -= changeX;
objDivCoordinates.top -= changeY;
objDiv.style.left = objDivCoordinates.left+"px";
objDiv.style.top = objDivCoordinates.top+"px";
objIframe.style.left = objDiv.style.left;
objIframe.style.top = objDiv.style.top;
mouseX = e.clientX;
mouseY = e.clientY;
}
function stopDrag(e) {
dragging = false;
}
</script>
</html>