Lawmakers loyal to Yasser Arafat denounced the Palestinian leader's critics today, saying they are trying to divide the Palestinian people. But the Palestinian legislature stopped short of punishing members who signed a statement accusing Arafat of allowing widespread corruption.

Arafat's critics also stepped back a bit in an effort to avoid a direct confrontation by telling the legislature they had not meant to offend Arafat by signing the document.

The outcome of the four-hour legislative session helped ease the controversy over the document, which since its release on Sunday has focused attention on Palestinian unhappiness with Arafat's management style and his approach to negotiations with Israel.

After the meeting, however, one of the legislators who signed the statement was shot and wounded. Police and family members said masked men shot Moawiyeh Masri in the leg on the doorstep of his home.

Nine members of the Palestinian Legislative Council were among the 20 intellectuals who signed the statement. They had feared that Arafat loyalists, who dominate the legislature, would vote to remove their parliamentary immunity from arrest and that they would be taken into custody. However, the legislature averted a showdown by deciding not to vote on the immunity question.

Eight of the document's signatories have been arrested, but after voting to condemn the attack on Arafat, the legislature asked that they be released. Palestinian Authority officials also said they have lifted the house arrest of two other signatories.

Outside the closed-door legislative session, Arafat's Palestinian opponents spoke as aggressively as ever.

"We have no regrets for these charges," said Hassan Khreisheh, one of the dissident lawmakers. "The public supports our petition. Arafat should apologize to us."

In Sunday's statement, the governing Palestinian Authority was accused of doing far less than it should to secure the return of Palestinian refugees, and to guarantee that Jerusalem would be the capital of a Palestinian state.

But the most controversial attack was against Arafat. The document said his leadership was marked by rampant corruption that allows a few Palestinians to enrich themselves at the expense of the rest.

Eyad Seraj, a human rights activist and longtime critic of the Palestinian leadership, predicted the criticism of Arafat will increase. Seraj said the controversy was a sign that Palestinians are increasingly embracing democracy.