Don't know for certain the truth of this whole affair, but this makes sense to me. Even if we were to assume this article is wrong, the question would remain: Does the Muslim world see it the same way? After all, it's well known that Arafat, a "peace-lover" in the eyes of the Western world, would make a pro-peace statement in the West, and then run home to his cronies and tell the Islamic media that he didn't really mean it, and that the goal of destroying Israel was still there.
So I don't know. But I figure the smart money is on this being a ploy to make Islam look stronger in the Mideast, and humiliate the US a bit. And if the elite and the politicians are too ignorant to know what they're doing, that's just a bonus.
PS- If anybody out there cares, I posted a brief comment about this on my Facebook page too. Look for Guntotin Wacko.