I think the sucide bombings are directed at Israeli morale, not world opinion. If Arafat really wanted to court world opinion, he'd adopt a Ghandi-like posture of non-violent resistance. Of course it would never happen, Arafat being too much of a bloody corrupt fool to demonstrate such vision.
Both, I think. It doesn't hurt that so many Israelis have joined the peace movement. The Palistinians sence victory and are stepping up the violence because they think it is working. Suicide for the nation of Israel to capitulate, but that is what many Israelis want. Oh well, it is their country.
It is always dangerous to speculate on the motivation of others. One possible goal is to secure a UN peace keeping force that would, of course, be dominated by his third world allies. The next step of course, would be an UN imposed peace giving him his demands. A second goal might be to goad Israel into a massive response that would lead to world wide sympathy for his cause. Then again, you could be right.