When Iraqis took to the streets to call for an attack on Israel and Saddam Hussein's official media announced that 7 million Iraqis had joined his "Jerusalem Army" to march on Israel last week, it looked at first like yet more troublemaking propaganda from Baghdad's dictator. But there is a sliver of truth in Saddam's posturing--one that may soon see his partisans at work in the Israeli-Palestinian conflict.
Through Arab banks with branches in the West Bank and the Gaza Strip, Saddam has funded cash payments of $10,000 apiece to families of each of the nearly 600 Palestinians killed in the...