The Palestinian Authority has used tens of millions of dollars it received from donors such as the European Union to finance terrorism, while Saudi Arabia has given a total of $550,000 in the last year to more than 100 families of Palestinian terrorists, according to a government report released yesterday. The 103-page report entitled, 'The Involvement of Arafat, PA Senior Officials and Apparatuses in Terrorism against Israel, Corruption, and Crime,' which Prime Minister Ariel Sharon plans to give US President George W. Bush in their meeting tomorrow, also labels the Palestinian Authority 'a supporting, encouraging, and actively operating body of terrorism' whose chairman, Yasser Arafat, was 'directly involved in the planning and execution of terrorist attacks.' 'It is crystal clear from a reading of this report that Arafat cannot be a partner for peace, and as long as he is in the picture there is no chance for peace,' said Minister-without-Portfolio Dan Naveh, who presented the report, dubbed 'The Arafat File,' at a press conference at the Prime Minister's Office yesterday afternoon. Naveh headed the committee that compiled the report, which is based on thousands of Palestinian documents seized during Operation Defensive Shield last month, IDF intelligence information, and Shin Bet interrogations of terrorists. He said the documents unequivocally prove Arafat's direct involvement - as the 'supreme leader' of his Fatah-based Aksa Martyrs Brigades - in scores of terror attacks against Israeli civilians over the past 18 months. Moreover, the report states that hundreds of Fatah activists operating in the Fatah's military wing, the Tanzim, and the Aksa Martyrs Brigades, were in fact being paid by the EU's $9 million monthly transfers to the PA. The EU's funding, which the report states amounts to roughly 10% of the total PA current budget (and the Arab states' $45 million monthly transfers) were funneled to terrorists by the PA 'by integrating them in the list of national security employees, despite the fact that in practice they operated in the framework of local branches of the Tanzim and the Al Aksa military Brigades,' the report states. 'The EU's money was being used by Arafat to indirectly finance terror activities,' Naveh said. The report notes that Arafat himself was 'personally involved' in the allocation of money to terrorist activists even though on most occasions he 'significantly cuts' the requested sum. Documents directly approved by the Palestinian leader and bearing his signature include the July 9, 2001 allocation of $350 for 24 Fatah members in Bethlehem, including the wanted terrorist Atef Abayat; a $600 allocation on September 19, 2001 to three senior Tanzim commanders, including those involved in the terror attack at a bat mitzva party in Hadera; a November 7, 2001 $800 allocation for each of the nine families of the Palestinian commanders killed in the Bethlehem area, including Atef Abayat; and a January 20, 2001 allocation of $350 to each of 12 Fatah/Tanzim terror activists in Tulkarm who were involved in fatal attacks against Israel. In addition, an undated document that was dealt with by Palestinian chief financier Fuad Shubaki - whom the report defines as logistical operator of financial aid and support of terrorist actions - that was likely approved by Arafat allocated $80,000 for the construction of a large arms production workshop, including a lathe, a milling machine, and equipment required for metal processing in the production of weapons such as rockets and mortars. All such weaponry was forbidden the PA under the Oslo Accords. The documents, some of which have been released over the last month or so, have been dismissed as 'forgeries' by the PA even though they have been handed over to Jordanian and Egyptian security officials who privately don't doubt their veracity, security officials say. The report, which also singles out imprisoned West Bank Tanzim leader Marwan Barghouti and Palestinian Intelligence chief Tawfik Tirawi as being directly involved in terror attacks against Israel, also mentions the involvement of several Arab states in PA terrorism, including Saudi Arabia, Iraq, Iran, and Syria. According to the report, Saudi Arabia has systematically transferred money to families of suicide bombers, including $545,000 transferred to 102 families of terrorists including relatives of nearly a dozen suicide bombers killed in 2001. The funds, which were transferred through the Arab Bank, provided each family with over $5,340. Additional documents mentioned in the report point to direct Saudi aid to the Islamic Jihad and Hamas terror organizations, funding which Naveh said was at odds with Saudi desires to be involved in the peace process. The report also contains letters of gratitude written by PA officials to Iraqi President Saddam Hussein for his country's financial aid to the PA. A small section of the report also details incidents of physical abuse against the Christian population in Bethlehem, including extortion, land confiscation, and other criminal activity which the report states were perpetrated by Palestinians with the full support of PA officials. The end of the report is devoted to the corruption and fiscal management within the PA.