PLO chief Yasser Arafat's support for Iraq has alienated him from key Arab patrons and set off a surge of radicalism in his own ranks that he may find hard to control.
By backing Iraqi President Saddam Hussein, who invaded Kuwait Aug. 2, Arafat cut off an important source of revenue, the oil sheiks of the Persian Gulf.He also harmed relations with Egyptian President Hosni Mubarak, the leading Arab moderate who had championed Arafat's peace initiative.
Whether these developments will jeopardize his leadership of the Palestine Liberation Organization remains to be seen.
Arafat has survived many challenges since he took over the movement in 1969. But with the PLO now threatened with a new schism as well as a funding squeeze, he is in a tight corner.
In the Israeli-occupied West Bank and Gaza Strip, Palestinians cheer Saddam, not Arafat, in daily demonstrations against the Americans and Saudis. Arafat faces a growing challenge in the territories, where a Palestinian uprising has raged for 21/2 years, from militants of the Islamic Hamas movement.
Hamas wants to escalate the stone-throwing riots against the Israelis into a full-blown guerrilla war. The passions unleashed by Saddam's actions work in their favor.
They see Saddam's military might and willingness to challenge the West and Israel as their best hope of liberating the occupied lands after decades of despair and humiliation.
In Syria, the Popular Front for the Liberation of Palestine and the Democratic Front for the Liberation of Palestine have called for a resumption of the armed campaign against Israel that was halted by the peace initiative Arafat launched in late 1988.
They are the largest guerrilla factions in the PLO after Arafat's Fatah group.
In Baghdad, the Palestine Liberation Front last week called on "progressive Arab forces to confront the invading American aggressors."
The group is led by Mohammed Abbas, or Abul Abbas, the mastermind of the Achille Lauro cruise liner hijack in October 1985 and the failed seaborne attack on Israel that led President Bush earlier this year to break off the U.S. dialogue with the PLO.
Few Palestinians were dismayed when Saddam invaded Kuwait and touched off a potentially explosive confrontation with the the United States. They were increasingly frustrated by the Arab rulers' reluctance to use their oil wealth to force Israel to leave the occupied territories.
Saddam played the Palestinian card shrewdly by linking any settlement of the Persian Gulf crisis to an Israeli withdrawal from the West Bank and Gaza, captured in 1967.
He appealed to the Arab masses, over the heads of their governments, for support for his stand against Israel and the United States.
He has succeeded to a large degree. Most Arabs see Washington as Israel's main protector and have long fumed at its failure to pressure the Jewish state into peace negotiations and a withdrawal from the occupied lands.