Yasser Arafat - Mohammed Abdel Rahman Abdel Raouf Arafat al-Qudwa al-Husseini ياسر عرفات

Throughout 1968, Fatah and other Palestinian armed groups were the target of a major Israeli army operation in the Jordanian village of Karameh, where the Fatah headquarters — as well as a mid-sized Palestinian refugee camp — were located.

The town's name is the Arabic word for 'dignity', which elevated its symbolic power in the eyes of the Arab people, especially after the Arab defeat in 1967. The operation came hard upon attacks, including rockets strikes from Fatah and other Palestinian militias, within the occupied West Bank. According to Said Aburish, the government of Jordan and a number of Fatah commandos informed Arafat that large-scale Israeli military preparations for an attack on the town were underway, prompting fedayeen groups, such as George Habash's newly formed group the Popular Front for the Liberation of Palestine (PFLP) and Nayef Hawatmeh's breakaway organization the Democratic Front for the Liberation of Palestine (DFLP), to withdraw their forces from the town. Though advised by a pro-Fatah Jordanian divisional commander to withdraw his men and headquarters to nearby hills, Arafat refused, stating, "We want to convince the world that there are those in the Arab world who will not withdraw or flee". Aburish writes that it was on Arafat's orders that Fatah remained, and that the Jordanian Army agreed to back them if heavy fighting ensued.

On the night of March 21, the IDF attacked Karameh with heavy weaponry, armored vehicles and fighter jets. Fatah held its ground, surprising the Israeli military. As Israel's forces intensified their campaign, the Jordanian Army became involved, causing the Israelis to retreat in order to avoid a full-scale war. By the end of the battle, nearly 150 Fatah militants had been killed, as well as twenty Jordanian soldiers and twenty-eight Israeli soldiers. Despite the higher Arab death toll, Fatah considered themselves victorious because of the Israeli army's rapid withdrawal. Arafat himself was on the battlefield, but the details of his involvement are unclear. However, his allies – as well as Israeli intelligence – confirm that he urged his men throughout the battle to hold their ground and continue fighting.

The battle was covered in detail by Time, and Arafat's face appeared on the cover of the December 13, 1968 issue, bringing his image to the world for the first time. Amid the post-war environment, the profiles of Arafat and Fatah were raised by this important turning point, and he came to be regarded as a national hero who dared to confront Israel. With mass applause from the Arab World, financial donations increased significantly, and Fatah's weaponry and equipment improved. The group's numbers swelled as many young Arabs, including thousands of non-Palestinians, joined the ranks of Fatah.

At the Palestinian National Council in Cairo on February 3, 1969, Yahya Hammuda stepped down from his chairmanship of the PLO, and Arafat took over. He became Commander-in-Chief of the Palestinian Revolutionary Forces two years later, and in 1973, became the head of the PLO's political department.