The real question about Arafat is when did he stop being a terrorist. It's an historical fact that he founded the PLO as a paramilitary group while under the protection of the Jordanians. He ws exiled, but continued his activities. He was an arms smuggler before that.
It was also in 1964 that the Palestine Liberation Organisation (PLO) was established, under the sponsorship of the Arab League, bringing together a number of groups all working to free Palestine for the Palestinians. The Arab states favoured a more conciliatory policy than Fatah's, but after their defeat by Israel in the 1967 Six-Day War, Fatah emerged from the underground as the most powerful and best organised of the groups making up the PLO, took over that organisation in 1969 when Arafat became the chairman of the PLO executive committee. The PLO was no longer to be something of a puppet organisation of the Arab states, wanting to keep the Palestinians quiet, but an independent nationalist organisation, based in Jordan.
Arafat developed the PLO into a state within the state of Jordan with its own military forces. King Hussein of Jordan, disturbed by its guerrilla attacks on Israel and other violent methods, eventually expelled the PLO from his country. Arafat sought to build a similar organisation in Lebanon, but this time was driven out by an Israeli military invasion. He kept the organization alive, however, by moving its headquarters to Tunis. He was a survivor himself, escaping death in an airplane crash, surviving any assassination attempts by Israeli intelligence agencies, and recovering from a serious stroke.
http://www.nobel.se/peace/laureates/1994/arafat-bio.htmlAlthough he was raised in Egypt (except for a short time with his uncle in Jerusalem, when British soldiers stormed the house and beat-up his uncle's family) he does have connections with Palestine through his parents. His nationality is Egyptian, however. As no Palestinian state existed or yet exists, he chose the mission to create it.
There has not been absolute truth that he himself is funding terorists, just transfering funds to the families of suicide bombers, which some feel is rather a social cause outside of the framework of terror. Others, in the Israeli camp, see that as funding and encouraging further attacks.
He is himself a multi-millionaire, with some 300Million dollars in his control. He has recently been shown to have been in total control of 900million dollars of IMS money that was supposed to be for infastrucure building in the PA. Not all of that money has been accounted for. There are still gaps and questions concerning his administarion of those funds.
Now he wants the total control of the PA cabinet appointments. He wants them to be responsible only to him. This is part of king-making, not democracy.