Palestinian court sentences Arafat aide in absentia

RAMALLAH, West Bank (Reuters) - A special anti-graft court convicted Mohammed Rashid in absentia on Thursday of embezzling millions of dollars during the rule of late Palestinian leader Yasser Arafat.

Rashid and two other businessmen were sentenced to 15 years in jail and ordered to return $33.5 million in stolen funds, in the biggest case against corruption that has festered during the Palestinian Authority's 20-year history.

An Iraqi Kurd who worked alongside Arafat for more than a decade, Rashid denied the charges and accused Palestinian President Mahmoud Abbas of leading a witch-hunt against his predecessor's old allies.

Prosecutors told the court, which was set up by Abbas two years ago, that Rashid profited from front companies and fled abroad after the death of Arafat in 2004.

His whereabouts are not known, but he is believed to have various homes in the Gulf and Britain. Rashid had accused Abbas and his family of owning assets worth tens of millions of dollars.

Rafiq Natsheh, head of the PA's anti-corruption commission, denied suggestions that Rashid's trial was politicized.

"This is only one of several files we are currently working on," he told Reuters. "Those guilty (of financial wrongdoing) cannot go on undetected."

Allegations of rampant corruption dogged Arafat's rule. Locals accused the leader of turning a blind eye to graft within his inner circle as donor aid poured into the West Bank and Gaza Strip following the 1993 Oslo Peace Accords.

(Writing by Noah Browning, additional reporting By Jihan Abdalla; editing by Crispian Balmer and Robert Woodward)