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Source: http://www.pmo.gov.il/PMOEng/Communication/Spokesman/gss/shabak170506.htm
PA Purchased Weapons with Israeli and Foreign Aid
(Prime Minister's Office) Fuad Shubaki, Arafat's finance person, who was apprehended on March 14 at Jericho prison, has admitted that upon the outbreak of the current round of Palestinian violence and terrorism in the autumn of 2000, Yasser Arafat ordered him to purchase large quantities of weapons, as much as the various funding sources would allow. Shubaki also financed the independent production of war materiel for the PA, including grenades, explosives, and RPGs. According to Shubaki, the financing for this war materiel came from international assistance, tax revenues from the Gaza Strip, customs revenues transferred by Israel, and funds from Arab countries. Shubaki said that the Al-Aqsa Martyrs Brigades and the Tanzim used weapons supplied by the PA security services, with Arafat's knowledge. Shubaki and Arafat were also directly involved in the Karine A weapons ship affair, which was financed and guided by the Iranian Revolutionary Guards and Hizballah.