By DALIA NAMMARI
The Associated Press
Saturday, December 30, 2006; 10:23 PM

RAMALLAH, West Bank -- Though much of the world regarded him as a tyrant, Saddam Hussein was mourned by Palestinians Saturday as a generous patron who remained one of their staunchest allies.

Saddam had rejected peace with Israel, sent money to the families of suicide bombers and welcomed many Palestinian refugees to Iraq.

"We heard of his martyrdom, and I swear to God we were deeply shaken from within," said Khadejeh Ahmad from the Qadora refugee camp in the West Bank. "Nobody was as supportive or stood with the Palestinians as he did."

Palestinians in the West Bank town of Bethlehem opened a "house of condolence," where dozens of people gathered on white chairs to drink black coffee and mourn the executed dictator.

There was at least one parade in his honor in Gaza, where some Palestinians displayed a poster with his image next to that of Palestinian leader Yasser Arafat.

Sami al-Askari, a political adviser to Prime Minister Nouri al-Maliki who was present at the hanging, said at about the time the noose was slipped over his head, Saddam shouted: "Palestine is Arab."

Early accounts of the execution indicated those were his final words. But in a videotape that surfaced later in the day, the former dictator was heard reciting a verse from the Quran a moment before his death.

During the first Gulf War in 1991, Saddam attacked Israel in a failed ploy to force his Arab brethren to abandon the U.S.-led coalition arrayed against him and join Iraq in fighting the Jewish state. As Saddam's Scud missiles flew overhead en route to Israel, Palestinians chanted: "Beloved Saddam, strike Tel Aviv."

He further endeared himself to the Palestinians during the recent uprising against Israel by giving $25,000 to the family of each suicide bomber and $10,000 for each Palestinian killed in fighting. The stipends totaled an estimated $35 million.

Saddam's support for the Palestinians _ whose cause is deeply popular with Arabs throughout the Middle East _ was at least partially aimed at cultivating grass-roots support for his regime.

Saddam's downfall _ his defeat by America, his capture in a filthy hole, his conviction and his execution _ dismayed Palestinians. They lionized the former Iraqi leader and praised his willingness to stand up to America and Israel when other Arab leaders would not.

"Saddam was a person who had the ability to say, 'No,' in the face of a great country," said Hosni al Ejel, 46, from the al Amari refugee camp near Ramallah.

Sabha Mohammed, 57, was stunned when her son told her that Saddam had been executed. Saddam had given her $25,000 to rebuild her house after a 2002 Israeli raid on the Jenin refugee camp.

"I immediately cried, because I felt that we, as Arabs and Muslims, lost a strong leader like Saddam," she said. "I hope the same thing happens to all the Arab and Muslim leaders because they didn't support Saddam and they stood silent, starting with the occupation of Iraq, through the U.S. army's arrest of Saddam, to his execution in the end."

Some Palestinians cited reports that Saddam had remembered them toward the end as evidence of his unshakable support.

But the grief was muted. Many in the West Bank and Gaza gave up on Saddam when he was captured by American soldiers three years ago.

In Bethlehem's "house of condolence," mourners sat beneath Iraqi flags and played Iraqi revolutionary songs, surrounded by pictures of Saddam. Outside, several cars parked outside had black strips of fabric tied to their antennae.

In the central Gaza town of Khan Younis, about 25 men and children marched through the street with pictures of Saddam.

In Gaza City, about 20 people sat in a garage that had been converted into a mourning area for Saddam. A poster on the wall displayed a picture of Saddam next to one of Arafat.

"Saddam Hussein gave Palestinians what no other Arab leader ever gave," said Mahmoud Abu Hasira, whose family organized the mourning area.

"He wanted the Palestinian people to have a state and a government and to be united," said Ghanem Mezel, 72, from the town of Saeer in the southern West Bank. "But God supports us, and we pray to God to punish those who did this."

In Israel, the response to the death of one of the nation's bitterest foes was muted. The government had no official comment on Saddam's execution

Deputy Defense Minister Ephraim Sneh expressed concerns about Iraq's path in the post-Saddam era. He told Israel Radio that Israel was concerned about the strengthening of Iranian influence in the Shiite sections of southern Iraq and also in the central government.

Iraq had also become a regional "power station" for terror that could spread chaos throughout the Middle East, he said.

"We have to be worried about what is going to happen now," he said.