Actually, it's a little known fact that Square still holds all rights to the Xenogears franchise, and that Xenosaga, while originally intended to be the prequel series, does not officially have anything to do with Xenogears, aside from serving as an homage to the original title. In fact, as of September 2005, Namco has stated that Xenosaga III is the final game in the series, and no more will be made, so there will never be a tie-in between the two games. This can be viewed as a good or a bad thing, as Square still has all rights to the Xenogears universe, and could eventually decide to make its own prequel/sequel series. It's unlikely, but it's an option.
Relevant Links:
Wikipedia on Xenosaga
Wikipedia on Xenogears
Those two pretty much explain the whole situation. So no, officially, the games are not connected to Xenogears. They're just tribute.