His relationship with Palestinian leader Yasser Arafat of Fatah was strained, with Gaddafi considering him too moderate and calling for more violent action. Instead he supported militia like the Popular Front for the Liberation of Palestine, Popular Front for the Liberation of Palestine – General Command, the Democratic Front for the Liberation of Palestine, As-Sa'iqa, the Palestinian Popular Struggle Front, and the Abu Nidal Organization. He funded the Black September Organization who perpetrated the 1972 Munich massacre of Israeli athletes in West Germany, and had the killed militants' bodies flown to Libya for a hero's funeral. Gaddafi also welcomed the three surviving attackers in Tripoli following their release in exchange for the hostages of hijacked Lufthansa Flight 615 a few weeks later and allowed them to go into hiding.

What Palestinian political figure had a poor relationship with Gaddafi?