Israeli intelligence agencies are looking closely at the West Bank and Gaza strip for signs of ties between Saddam Hussein and the followers of Usama bin Laden. In recent months, an Israeli report says, Iraq has channeled millions of dollars to support Palestinian terror groups.
But while Al Qaeda and Palestinian militants, some backed by Iraq, share a hatred of Israelis and Americans and use similar methods, such as suicide attacks, Israeli intelligence sources say no link has yet been conclusively established between Saddam and Al Qaeda.
Iraq has not tried to hide its support for Palestinian militias that have killed hundreds of Israelis in shootings and bombings in the past 28 months of fighting.
The Arab Liberation Front, a pro-Iraqi Palestinian group, says it has disbursed $35 million of Saddam's money to relatives of Palestinians killed or wounded in the confrontations with Israel.
Families of suicide bombers -- there have been 90 since September 2000 -- are entitled to $25,000 each, a small fortune in the impoverished Palestinian areas. Relatives of those killed in clashes with troops are paid $10,000. Militants whose homes are demolished by Israel as a deterrent against future violence receive $5,000.
Mohanna Shbatt, an Arab Liberation Front leader in Gaza, said Friday that Saddam gave the money because he believes the Palestinians are fighting for all Arabs, including the restoration of Muslim sovereignty over Jerusalem holy sites.
"Saddam felt the martyrs were giving their blood for every other Arab," said Shbatt, 28, who studied chemistry in Iraq.
Israel contends the Iraqi money is intended to encourage attacks on Israelis. After a Jan. 5 blast that killed 22 bystanders in Tel Aviv, Saddam praised suicide bombers as "champions of self-sacrifice who confront the Zionist aggression with their lives."
According to a dossier by Israel's Shin Bet security service, "over the past few months, Iraq has given substantial financial and military aid to terrorist organizations (in the West Bank and Gaza) operating under its purview."
Palestinians have also received weapons and explosives training at Iraqi bases, including the "Al Quds" camp near Baghdad, the Shin Bet said.
Most trainees are members of the Arab Liberation Front and a second pro-Iraqi faction, the Palestine Liberation Front headed by Mohammed Abbas, better known as Abul Abbas, who is wanted for instigating the 1985 hijacking of the Achille Lauro cruise ship. An elderly American was killed during the hijacking.
The two groups have few followers in the West Bank and Gaza Strip, and nearly all attacks against Israelis have been carried out by much larger factions, including Hamas, Islamic Jihad and the Al Aqsa Martyrs' Brigade, a militia linked to Yasser Arafat's Fatah movement.
Graduates of the Iraqi training courses were asked by Abul Abbas, among other things, to attack Israel's Ben Gurion International Airport, the Tel Aviv central bus station and Israeli army bases in the West Bank, according to the Shin Bet report, based on interrogations of 13 "trainees" eventually caught in Israeli sweeps in the West Bank.
The recruits balked because of heavy security around the targets. Several Palestinians trained in Iraq were later involved in the killing of a young Israeli, but the Shin Bet does not accuse them of involvement in other deadly attacks.
President Bush said this week he fears Saddam could secretly "provide one of his hidden weapons to terrorists, or help them develop their own." Bush did not say which groups he believed could receive Iraqi weapons.
Boaz Ganor, an Israeli counter-terrorism expert, said he knows of no Iraqi ties to terror groups, beyond Baghdad's relationship with Palestinian militias and possibly Osama bin Laden's Al Qaeda.
After the Sept. 11 terror attacks, Israel's intelligence began looking into a possible connection between Al Qaeda and Palestinian militants in an effort to link its conflict with the Palestinians to the U.S.-led war on terrorism.
Prime Minister Ariel Sharon said in December that Al Qaeda members had infiltrated the Gaza Strip and Lebanon and were working to target Israel. However, he did not provide details, and the Palestinians denied any connection to bin Laden's terror network.
Arafat has denounced bin Laden and demanded he stop using the Palestinian cause as a reason for Al Qaeda attacks.
A senior Israeli security source told The Associated Press this week that Israel has not yet found evidence of an Iraqi-Palestinian-Al Qaeda triangle, and that several investigations into possible Al Qaeda ties to Palestinian militias have so far not yielded substantial results.
Ganor said Al Qaeda has put out feelers to Palestinian groups, but ties are at a very preliminary stage.
Israel has arrested several Hamas activists in the Gaza Strip on suspicion they trained with Al Qaeda in Afghanistan. One suspect had allegedly been asked by Al Qaeda to establish a cell in Gaza.
Saddam's payments to those killed and wounded in the Palestinian uprising have ensured his popularity in the West Bank and Gaza Strip.
He is widely seen as the only Arab leader who truly cares about the fate of the Palestinians, and there are frequent pro-Iraqi marches. Arafat, who embraced Saddam in the 1991 Gulf War, has been careful not to take sides this time.
Rashid Nasser, 30, said his family received $25,000 from Iraq after his brother, Jamal, blew himself up near a Jewish settlement in the West Bank in 2001, killing only himself. Nasser said he is using the money to build a house for his family.
The family of 60-year-old Ahmed Hamdouni, who was killed in fighting in the Jenin refugee camp last year, said it spent the $10,000 Iraqi stipend to help two of his children stay in medical school. "It's a small amount of money, but it helps," said Majed Hamdouni, 17.