When the PLO was created, it was viewed by the Arab governments largely as an instrument of their own interests. Only after the guerrilla organizations became the major components of the PLO, and Yasir Arafat became its leader in 1968, did it take on greater credibility among Palestinians themselves. During the early 1970s political campaigns among Palestinian communities in the occupied territories, in refugee camps and throughout the world, led to virtual unanimous support for the PLO as the voice of the still-stateless Palestinians.
In 1974 the United Nations invited the PLO leader to address the General Assembly. Yasir Arafat appeared bearing both a gun and an olive branch, and pleaded with delegates "do not let the olive branch fall from my hand." That same year, the Assembly identified November 29th, anniversary of the day of the partition resolution years before, as an International Day of Solidarity with the Palestinian People. It also recognized the PLO as the "sole legitimate representative of the Palestinian people," and invited the PLO to become an official non-state "observer" at the UN, allowing it participation in all debates, and welcoming a Palestinian ambassador.
While the PLO soon won diplomatic recognition in capitals across the world, Arab leaders were less than pleased at its independent stance. In Jordan, in particular, King Hussein saw the rise of the PLO as a threat to Jordan's traditional influence in the West Bank and East Jerusalem. In 1982 when Ariel Sharon launched his "Jordan is Palestine" campaign, the king's opposition was seen as less than enthusiastic. Only with the first intifada, when virtually unanimous Palestinian rejection of Jordan's role became undeniable, did the king finally sever his kingdom's links to Palestinian institutions.
When the PLO declared Palestine independent in 1988, the new state, which still controlled no land of its own, quickly attained diplomatic relations with more governments than recognized Israel.
To the U.S., the PLO was a terrorist organization and Yasir Arafat an arch-terrorist. It was the same epithet used to condemn Nelson Mandela's African National Congress, and a host of other national liberation movements. It was the same, in fact, as the accusation the British hurled at Menachem Begin and other Zionist military leaders in the pre-state period of Israeli history. In 1975 Henry Kissinger had promised Israel that the U.S. would never recognize or negotiate with the PLO.
When the UN invited Arafat to address the General Assembly in November 1988, just after the Palestinian Declaration of Independence, Washington refused to issue a visa, despite its obligations as Host Country of the United Nations. The entire UN—diplomats, security guards, translators, secretariat staff—packed up and flew to Geneva for one day, to hear the PLO chairman. In that speech, Arafat again rejected terrorism and recognized Israel; the goal was to open a dialogue with the U.S. In an internationally broadcast press conference Arafat read his speech; word came from Washington that it wasn't good enough. The press corps was recalled to the auditorium in Geneva's Palais des Nations, and the revised speech read out. In return, the U.S. allowed a mid-level diplomat, then ambassador to Tunisia, to open talks with the PLO. But the talks languished, and were soon cancelled.
Only with the Oslo process, when the Palestinians had accepted Washington's centrality in the peace talks, did the U.S. accept the PLO as a full-fledged negotiating partner. During Bill Clinton's presidency Yasir Arafat was one of the most frequent international visitors to the White House.
In the first two years of the Bush administration, however, Arafat remained untouchable. President Bush refused even to speak with the Palestinian leader when their paths crossed at the United Nations, and by the spring of 2002 called explicitly for the replacement of the PLO chairman and President of the Palestinian Authority.