Pacepa goes into some detail about Arafat's training by the KGB here

Submitted by sara (United States), Mar 27, 2012 at 19:23

http://www.jewishvirtuallibrary.org/jsource/Terrorism/arafatkgb.html

... "I was given the KGB's "personal file" on Arafat. He was an Egyptian bourgeois turned into a devoted Marxist by KGB foreign intelligence. The KGB had trained him at its Balashikha special-ops school east of Moscow and in the mid-1960s decided to groom him as the future PLO leader. First, the KGB destroyed the official records of Arafat's birth in Cairo, replacing them with fictitious documents saying that he had been born in Jerusalem and was therefore a Palestinian by birth.

The KGB's disinformation department then went to work on Arafat's four-page tract called "Falastinuna" (Our Palestine), turning it into a 48-page monthly magazine for the Palestinian terrorist organization al-Fatah. Arafat had headed al-Fatah since 1957. The KGB distributed it throughout the Arab world and in West Germany, which in those days played host to many Palestinian students....

Arafat was an important undercover operative for the KGB. Right after the 1967 Six Day Arab-Israeli war, Moscow got him appointed to chairman of the PLO. Egyptian ruler Gamal Abdel Nasser, a Soviet puppet, proposed the appointment. In 1969 the KGB asked Arafat to declare war on American "imperial-Zionism" during the first summit of the Black Terrorist International, a neo-Fascist pro-Palestine organization financed by the KGB and Libya's Moammar Gadhafi. It appealed to him so much, Arafat later claimed to have invented the imperial-Zionist battle cry. But in fact, "imperial-Zionism" was a Moscow invention, a modern adaptation of the "Protocols of the Elders of Zion," and long a favorite tool of Russian intelligence to foment ethnic hatred. The KGB always regarded anti-Semitism plus anti-imperialism as a rich source of anti-Americanism...."

Although most of the source material I am seeing on the internet is from Pacepa, here is another defector's anectdote:

http://richgibson.com/KGBhiddenhand.htm

... "The Mitrokhin Archive II, published three years after the KGB archivist's death, deals with Soviet operations in the developing world. The documented links between former Chilean leader Salvador Allende and the Kremlin, and the clandestine funding of senior politicians in Delhi, have already caused uproar but there is plenty more to prove Moscow's complicity in some of the more sinister world events. In particular, Mitrokhin produces the best evidence yet seen of the KGB's hitherto hidden hand in directing international terrorism.

During the Reagan era the CIA tried, and failed, to find proof that Palestinian extremists had received secret backing from the Politburo. Now we learn that Waddi Haddad, the god­father of modern terrorism, was codenamed Natsionalist (sic) and funded by the KGB, which also supplied him with weapons and guided him to particular targets.

Haddad led the Popular Front for the Liberation of Palestine (PFLP) and achieved worldwide notoriety in September 1970 when he pioneered air piracy as an instrument of political blackmail. Britain, Germany, Switzerland and the US succumbed to his demands in return for the release of prisoners, including Leila Khalid, who was being held in a London police station after a failed hijack bid.

It is largely thanks to Haddad's innovative approach to terrorism that airline passengers now suffer the inconvenience of security checks and long queues. In May 1970 KGB chairman Yuri Andropov reported to Leonid Brezhnev that his organisation controlled "the external operations of the PFLP to a certain degree”, and Mitrokhin duly copied the message. This is the smoking gun that CIA analysts spent years trying to find, encouraged by Bill Casey and Alexander Haig, who felt sure such a link was to be found but were to be disappointed.

Slightly less convincing is the evidence against Yassir Arafat, who was cultivated by the KGB but apparently never recruited. Arafat's case highlights the problem of discriminating between the manuscript notes made by Mitrokhin while he was in the organisation, and his co-author's contribution, which has put them in their historical context. Christopher Andrew tells us the KGB was "doubtless well aware that Arafat's claims to have been born in Jerusalem were fraudulent”, but he acknowledges that this assertion is speculation, based not on material supplied by Mitrokhin but an inference drawn from one of Arafat's biographies.

The authors are on firmer ground when they reveal that Arafat's trusted intelligence chief, Hani al-Hasan, had been a KGB source, codenamed Gidar, since 1968 ... "

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