The US State Department has recently released this news. The original document is here, but no-one seems to be covering it.
What it says is that the State Department knew (in 1973) that Arafat was behind the kidnap and assasination of two US and a Belgian diplomat. Despite this, they (and particularly the Carter administration) continued to negotiate with him, to connive at his receipt of a Nobel peace prize and to urge Israel continually to make concessions to him and to Fatah.
The revelation is a sort of backhanded Christmas present, I suppose.
Happy New Year!