When U.S. officials and Middle East policy experts in Washington were asked what they thought of allegations that the new Palestinian prime minister had financed the 1972 Munich massacre, the reactions ranged from shrugs to outright laughter.

“Terrorist? Who isn’t?” one official remarked. “The Israelis don’t need to make peace with their friends.”

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Edward Abbington, a former U.S. consul general in Jerusalem who now works as a paid lobbyist for the Palestinian Authority (PA) in Washington, tersely dismissed the allegations as ‘not relevant.’ A senior aid to Abbas, Maen Areikat, scoffs at the story and says in a phone interview that Daoud’s account ‘bears no relationship to reality.’ He adds: “Since the mid-1970’s, [Abbas] has been advocating contacts with Israelis, even when it was considered taboo.”

For radical Islamic groups in Gaza and the West Bank, such as Hamas, contacts with Israelis other than through violence still are taboo. After Israeli helicopter gunships failed to assassinate him in a rocket attack in Gaza on June 8, Hamas leader Abdel Aziz Rantissi told reporters that his movement would continue to carry out suicide attacks ‘until not one Jew is left in Palestine.’ Abbas met with Rantissi and other Hamas leaders shortly before that attack, hoping to negotiate a temporary halt to the terror.

“Here’s a guy who negotiated the 1993 Oslo Accords with Israel, whom the Israelis say has put terrorism behind him,” says Patrick Clawson, deputy director of the Washington Institute for Near East Policy. “Even the Israelis say that he has changed his mind and changed his activities and is a guy that they can live with. We can’t really ask for more than that.”

The Israel Defense Forces (IDF) have captured more than one million pages of documents from PLO and Palestinian offices in Gaza and the West Bank since the fighting intensified as a result of the Passover massacre in March 2002. The documents include checks from the PA finance ministry to militia leaders and to family members of suicide bombers, many of them bearing handwritten notes and detailed instructions from Arafat.

According to Israeli sources, the IDF also has identified documents linking Abbas to recent terrorist attacks but is refusing to release them because Israeli Prime Minister Ariel Sharon and President Bush both have invested too heavily in Abbas as a partner for peace. Areikat doubts such documents exist. “This seems to be part of an Israeli smear campaign against Abu Mazen,” he says.

At the State Department, the past associations of Abbas are considered less important than his present usefulness as a fig leaf or alternative to Arafat. “President Bush and Prime Minister Sharon believe they have a partner for peace in Prime Minister Abbas,” says a spokesman for the department’s Near East bureau. “For the past 10 years, he has consistently renounced terrorism within the Palestinian community.”

Matthew Levitt, a former FBI counterterrorism analyst who now is with the Washington Institute for Near East Policy, notes that Abbas is not the only former terrorist whom the Israelis have rehabilitated. “There are plenty of others, including people who were directly involved in Munich, whom the Israelis are willing to work with today,” he says. 

“The history is the history. Even recent history is history. Look at Mahmoud Dahlan,” the former Gaza security chief whom Israel and the United States now tout as a ‘reformer’ who can clean house in Arafat’s stable of a dozen security organizations. “As recently as two years ago, Mahmoud Dahlan had blood on his hands. What matters is where he and the others stand today,” Levitt says.

But ties to terror are not the only concerns regarding Abbas. There also is the matter of a 1983 book he authored that claimed the Zionist movement ‘was a partner in the slaughter of the Jews’ during the Third Reich, and that the Nazis killed ‘only a few hundred thousand’ Jews, not millions. Such Holocaust denial is a staple feature of anti-Semitic literature worldwide, and frequently surfaces on state-run Palestinian Authority Television and throughout the Arab world.

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Kenneth R. Timmerman is the author of Countdown to Crisis: the Coming Nuclear Showdown with Iran (Crown Forum 2005), and was nominated jointly with Amb. John Bolton for the Nobel Peace prize in 2006 for his work on Iran. He is the president of the Foundation for Democracy in Iran, and is the Republican nominee for Congress in Maryland's 8th District.