Iran and the Palestinian Authority, then headed by Yasser Arafat, reached a secret agreement in 2002, which called for the creation of branch Iranian revolutionary guard corps bases in the West Bank and the Gaza Strip in exchange for military aid to the Palestinian Authority.

Transportation Minister Shaul Mofaz, who had been serving as defense minister at the time, discovered the details of the deal on Monday.

According to Mofaz, Arafat formulated the deal with Iranian leaders in secret meetings. Mofaz added that as part of the deal Iran supplied the Palestinian Authority with 50 tons of military equipment as specified by Arafat. This equipment was intercepted by the Israel Defense Forces on munitions ship "Karin A" in 2002.

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Mofaz added that the capture of Karin A had revealed the depth of the relations that had begun to form between Arafat and the Iranian leadership. The former defense minister believes that as a result of this affair and the revelation of the budding relationship between Arafat and Iran, U.S. President George Bush changed his attitude and began working towards the removal of Arafat from the Palestinian leadership.

Mofaz spoke at an event honoring Israel's first ambassador to Iran following his large contribution to the University of Haifa's Persian Gulf and Iran studies department. Mofaz said in his address that the threats made by Iran against Israel should not be taken lightly. He said that he strongly believes that if Iran is successful in developing nuclear weaponry, it may pose an existential threat to Israel.