JERUSALEM - Democratic presidential frontrunner Sen. Barack Obama served as a paid director on the board of a nonprofit organization that granted funding to a controversial Arab group that mourns the establishment of Israel as a "catastrophe." (Obama has also reportedly spoken at fundraisers for Palestinians living in what the United Nations terms refugee camps.)

The co-founder of the Arab group, Columbia University professor Rashid Khalidi, is a harsh critic of Israel who reportedly worked on behalf of the Palestine Liberation Organization when it was labeled a terror group by the State Department.

Khalidi held a fundraiser in 2000 for Obama's failed bid for a seat in the U.S. House of Representatives.

In 2001, the Woods Fund, a Chicago-based nonprofit that describes itself as a group helping the disadvantaged, provided a $40,000 grant to the Arab American Action Network, or AAAN, at which Khalidi's wife, Mona, serves as president. The Fund provided a second grant to AAAN for $35,000 in 2002.

Obama was a director of the Woods Fund board from 1999 to Dec. 11, 2002, according to the Fund's website. According to tax filings, Obama received compensation of $6,000 per year for his service in 1999 and 2000.

The $40,000 grant from the Woods Fund to AAAN constituted about a fifth of the group's reported grants for 2001, also according to tax filings. The $35,000 Woods Fund grant in 2002 made up about one-fifth of AAAN's reported grants for that year as well.

Headquartered in the heart of Chicago's Palestinian immigrant community, AAAN describes itself as working to "empower Chicago-area Arab immigrants and Arab Americans through the combined strategies of community organizing, advocacy, education and social services, leadership development, and forging productive relationships with other communities."

Speakers at AAAN dinners and events routinely have taken an anti-Israel line. The group co-sponsored a Palestinian art exhibit, titled "The Subject of Palestine," that featured works related to what Palestinians call the "nakba" or "catastrophe" of Israel's founding in 1948.

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The theme of AAAN's Nakba art exhibit, held at DePaul University in 2005, was "the compelling and continuing tragedy of Palestinian life ... under [Israeli] occupation ... home demolition ... statelessness ... bereavement ... martyrdom, and ... the heroic struggle for life, for safety, and for freedom."

Another AAAN initiative, "Al Nakba 1948 As Experienced by Chicago Palestinians," seeks documents related to the "catastrophe" of Israel's founding.

Although AAAN co-founder Rashid Khalidi has at times denied working directly for the PLO, he reportedly served as director of the official PLO press agency WAFA in Beirut from 1976 to 1982, a period during which the PLO committed scores of anti-Western attacks and was labeled by the U.S. as a terror group. Khalidi's wife, Mona Khalidi, reportedly was WAFA's English translator during that period.

Khalidi also advised the Palestinian delegation to the Madrid Conference in 1991. During documented speeches and public events, Khalidi has called Israel an "apartheid system in creation" and a "racist" state. Critics have accused him of excusing Palestinian terrorism, a charge he denies.

He dedicated his 1986 book, Under Siege, to "those who gave their lives ... in defense of the cause of Palestine and independence of Lebanon."

While the Woods Fund's contribution to Khalidi's AAAN might be perceived as a one-time contact with Obama, there is evidence of a deeper relationship between the presidential hopeful and Khalidi.

According to a professor at the University of Chicago who said he has known Obama for 12 years, the senator first befriended Khalidi when the two worked together at the university. The professor spoke on condition of anonymity. Khalidi lectured at the University of Chicago until 2003; Obama taught law there from 1993 until his election to the Senate in 2004.

Asked during a radio interview with this reporter on WABC's John Batchelor program about his 2000 fundraiser for Obama, Khalidi said he "was just doing my duties as a Chicago resident to help my local politician."

Khalidi said he supports Obama for president "because he is the only candidate who has expressed sympathy for the Palestinian cause."

Khalidi also lauded Obama for "saying he supports talks with Iran. If the U.S. can talk with the Soviet Union during the Cold War, there is no reason it can't talk with the Iranians."

Concerning Obama's role in funding AAAN, Khalidi claimed he "never heard of the Woods Fund until it popped up on a bunch of blogs a few months ago." He terminated the interview when pressed further about his links with Obama.

Contacted by phone, Mona Khalidi refused to answer questions about AAAN's involvement with Obama.

The Obama campaign did not reply to a list of questions sent by e-mail to the senator's press office.

In addition to questions about his relationship with Khalidi, Obama may face increased scrutiny over his ties to William C. Ayers, a member of the Weather Underground terrorist group that sought to overthrow the U.S. government and took responsibility for a string of bombings in the early 1970's.

Obama served on the Woods Fund board alongside Ayers (who is still on the board). Ayers, a professor at the University of Illinois at Chicago, has written about his involvement with the Weather Underground's bombing of U.S. governmental buildings including the Capitol in 1971 and the Pentagon in 1972.

Although charges against him were dropped in 1974 due to prosecutorial misconduct, Ayers told a newspaper reporter several years ago that he had no second thoughts about his violent past. "I don't regret setting bombs. I feel we didn't do enough," Ayers told The New York Times in an interview published, ironically, on Sept. 11, 2001.

In his memoir, Fugitive Days, Ayers wrote: "Everything was absolutely ideal on the day I bombed the Pentagon" - though he continued with a disclaimer that he didn't personally set the bombs but his group placed the explosives and planned the attack.

Besides serving with Obama on the board of the Woods Fund, Ayers contributed $200 to Obama's senatorial campaign fund and has served on panels with Obama at several public speaking engagements.