Yes, the KGB did. They also pumped a lot of money, time, and effort into building a heroic public image of Arafat that, unfortunately, too many useful idiots swallowed. There was an interesting thread on it not long ago, an article by a former Romanian KGB officer who was tasked (before he defected) with creating an image for Arafat. I wish I could post a link to it, but I'm not that good with HTML.
Makes my brood boil to remember that this piece of sh*t was given the Nobel Peace Prize.........or was it the 'piece prize'?