You can employ the following scenarios to cluster virtual machines with the iSCSI protocol:

You can use a virtual machine as the iSCSI target. The setup involves at least three virtual machines. Two virtual machines are the cluster nodes that act as iSCSI initiators, so you must install the iSCSI initiator software in these virtual machines. The third virtual machine acts as the iSCSI target. The iSCSI target virtual machine must be running for clustering to work successfully.

You can use a host on your network as the iSCSI target. Each cluster node (virtual machine) acts as an iSCSI initiator, so you must install the iSCSI initiator software in each virtual machine. Then you install the iSCSI target software on the target host.