Maybe they should have named it Bowling for Palestine. Bowlmor Lanes, a fixture in New York City's Greenwich Village neighborhood for decades, was secretly bankrolled, in part...

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NEW YORK — Maybe they should have named it Bowling for Palestine.

Bowlmor Lanes, a fixture in New York City’s Greenwich Village neighborhood for decades, was secretly bankrolled, in part, by the late Yasser Arafat, newly released documents reveal.

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Using a holding company, Arafat quietly sank about $1.3 million of Palestinian Authority money into the business in 2002, two years before his death.

Bowlmor is several blocks from the campus of New York University and is popular with Manhattan hipsters, who pay about $8 a game per person to bowl in the evenings and on weekends. The alley also advertises itself on its Web site as an ideal location for bar and bat mitzvahs for Jewish teens.

The news, first reported in Bloomberg Markets Magazine, hit some Bowlmor patrons like a 15-pound ball taking down the headpin.

“If I had known, I wouldn’t have come, but I promised the kids,” said financier Steve Saslow, 55, with his 4-year-old and 8-year-old in tow.

It apparently also came as a surprise to Bowlmor’s owners, a company called Strike Holdings, which has lanes on Long Island and in Maryland and Florida.

The firm said it was “shocked” to learn Arafat was behind the investment — and planned to return the money and sever any ties to the Palestinians.

“This information was never disclosed to us previously, and had we known the source of these funds, which represents approximately 2 percent of our company’s equity, we never would have accepted them,” spokeswoman Marcia Horowitz said.

“We do not endorse their values, and we do not want to be affiliated with them in any way.”

With its disco atmosphere and prime location, Bowlmor has become the top-grossing alley in the city — a popular spot for office parties and young singletons.

Bowlmor has been around since 1938, but it was sold in 1997 to entrepreneur Tom Shannon.

Shannon happened to attend business school with Arafat’s U.S. investment manager, Zeid Masri, who decided to park some Palestinian Authority cash in Bowlmor.

The $1.3 million, funneled through a company called Onyx Funds, was just a small piece of a fortune that Arafat invested in companies across the Middle East and the United States.

The money was among $799 million in international investments by Arafat detailed in newly released documents, Bloomberg Markets reported. Other holdings included $285 million in Orascom, an Egyptian cellphone company, and $3.2 million in the U.S. software firm Simplexity, it said.

Arafat, the icon of the Palestinian cause who died in November, is said by Israel to have stashed away millions of dollars in aid that the Palestinian Authority received from the United States, Europe and Arab nations.

Arafat made the investments abroad with tax money that he “diverted” from the Palestinian finance ministry, according to a September 2003 International Monetary Fund (IMF) report on the Palestinian economy.

Israel collected import taxes for goods destined for the territories and passed money to the authority.

Israel halted the payments after violence erupted in the West Bank and Gaza in September 2000. By the end of 2002, the Palestinian Authority owed its ministries and suppliers as much as $531 million, or 10 percent of gross domestic product, the IMF report says.

Masri figured the stake would be a moneymaker, but it looks like a gutter ball for the Palestinian Authority, because Strike Holdings has not paid any dividends on the investment.

Information from Reuters, The Associated Press and Bloomberg News is included in this report.