Fathi Shkaki, the Jihad leader, had just attended a meeting in Tripoli, capital of Libya, with a senior Iranian envoy at which they discussed plans to assassinate the PLO chairman. Islamic Jihad and Iran are both bitterly opposed to the peace agreement between Israel and the PLO signed by the Palestinian leader.
The Iranian emissary who met Shkaki was Hussein Shaikholeslam, the deputy foreign minister for Arab affairs, says the source. Mr Shaikholeslam, who is also believed to be deputy head of Iranian intelligence, has been a leading hardliner in the Iranian government since he helped organise the takeover of the US embassy in Tehran in 1979.
Iranian intelligence believes the PLO gave Mossad, the Israeli foreign security organisation, details of Shkaki's itinerary and false passport, enabling them to arrange his assassination outside his hotel in Valletta on 26 October. Israel has not claimed responsibility for the killing of Shkaki, but is widely believed to have been behind it.
Shkaki checked into room 616 of the Diplomat hotel in Valletta on the morning he was killed. He had shaved off his beard and was wearing a wig, but had no bodyguards. When he returned from a brief shopping trip he was met by two men on a motorcycle, one of whom shot him six times in the head.
Relations between Mr Arafat and Iran, which is the main financial and political supporter of Islamic Jihad, have deteriorated sharply this year. Three months ago Mr Arafat attacked Iran, saying: "No matter how much money you provide to Jihad, you will never succeed in stopping the peace process." Iran, in turn, has denounced Mr Arafat for supporting the American and Israeli policy of isolating Iran.
Islamic Jihad, one of the most effective guerrilla organisations in the Middle East, was created on the Iranian model.
Iran continues to denounce Mr Arafat and the Oslo agreement, expressing particular rage at his offer of condolences after Yitzhak Rabin, the Israeli prime minister, was assassinated on 4 November. Iranian intelligence is said to be still targeting Mr Arafat, whose own security has been much increased since the deaths of Shkaki and Rabin.
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