Jerusalem (CNSNews.com) - The capture of a Palestinian terrorist leader earlier this week in Iraq advances the war on terrorism and could provide valuable information on Yasser Arafat's support for terrorism, security analysts here suggested Friday.

Muhammed Abbas, leader of the Palestine Liberation Front (PLF), was nabbed Monday by American forces in Baghdad. His arrest was made public late Tuesday evening.

Abbas, a.k.a. Abu Abbas, was responsible for the hijacking of an Italian cruise liner Achille Lauro in 1985, during which American Jewish passenger Leon Klinghoffer, who was wheelchair-bound, was murdered and thrown overboard into the Mediterranean Sea.

The capture of Abbas was significant on several levels, said analyst Yoram Schweitzer from the Jaffee Center for Strategic Studies in Tel Aviv.

The most significant point of the U.S. capture of Abbas was that it showed that the United States was maintaining its policy of pursuing terrorists and not letting them go free, Schweitzer said.

According to reports, the United States knew for a long time that Iraqi leader Saddam Hussein was harboring Abbas.

"On an operational level, [Abbas can] provide America with more information [regarding] the Iraqi terror policy," Schweitzer said in telephone interview Friday.

Analyst Barry Rubin said that the capture of Abbas could also shed light on Palestinian Authority Chairman Yasser Arafat's involvement in terrorism.

"Abbas is in a position to implicate Yasser Arafat in detail on the [Palestine Liberation Organization] leader's involvement in terrorism and connections with Saddam," Rubin wrote in Friday's Jerusalem Post.

"The PLF hijackers told hostages on the Achille Lauro , 'We came on behalf of Yasser Arafat.' Arafat was the man who smuggled Abbas to safety after that terrorist attack," Rubin said.

For Israelis, the capture of Abbas was also significant because Abbas had been serving as one of the middlemen between the Iraqis and the Palestinians, Schweitzer said.

Openly, Saddam was an ardent supporter of the Palestinian uprising, sending large financial rewards to the families of suicide bombers, generally backing the violence and promoting the destruction of the state of Israel.

Abbas was primarily involved in sending financial support to the Palestinians for the intifadah, but his group was also involved in trying to carry out attacks, including a foiled plan to attack Israel's main airport near Tel Aviv.

He was one of the leading supporters of Arafat, Schweitzer said.

Abbas was also responsible for a 1979 terror attack in the northern Israeli border town of Nahariya, which is etched in the minds of Israelis.

Terrorists murdered the father of the Haran family and his toddler daughter. His wife, who survived the attack by hiding from the terrorists, accidentally smothered her infant daughter trying to keep her quiet.

Israel welcomed the capture of Abbas and hailed it as a "good step" in the war against terrorism.

"We are pleased that he was caught. He is a murderer and a terrorist who should be brought to justice," an Israeli official said Friday.

Everyone remembers the hijacking of the Achille Lauro and the death of Klinghoffer, who was probably killed because he was Jewish, said the official who asked not to be named. Israel also remembers the murder of the Haran family in Nahariya, she said.

"This is a good step that everyone should do ... [to prove] that terrorists should not be forgiven that they're going to be hunted and brought to trial. This is justice," the official added.

The Palestinian Authority demanded the United States release Abbas immediately citing the 1995 interim agreement between the Palestine Liberation Organization and Israel, to which then-President Bill Clinton was a witness and co-signer.

PA Minister Saeb Erekat noted that the agreement includes a clause that states PLO members cannot be arrested or tried for acts committed prior to the September 1993 signing of the Oslo Accords.

Washington rejected that claim. "The United States is not a party to that or any amnesty arrangements regarding Abu Abbas," State Department spokesman Phil Reeker said.

Israel also rejected that argument charging that the PA had violated or breached almost every article of the Oslo Accords and could not now claim protection from the agreement just because Abbas was arrested, the Israeli official said.

Washington has not decided yet whether Abbas will be brought to trial in the United States or extradited to Italy. The United States actually dropped its charges against Abbas years ago because it did not believe it could convict him on the evidence it had. Italy sentenced Abbas to life in prison in absentia in 1986.

The Israeli official said Israel does not care if Abbas is taken to the United States or Italy as long as he is brought to justice.