A former peace negotiator with Israel who served for years as a top aide to Yasir Arafat says President Mahmoud Abbas’s bid for membership with the United Nations is a mistake that will result in Palestinian suffering.

Mohammed Rachid, who left his position with the Palestinian Authority months after Arafat died and rarely gives interviews, told The Daily Beast that, much like the second intifada 11 years ago, the campaign could cost Palestinians their relationship with key allies and their international legitimacy.

He also accused Abbas and others of nurturing false hopes among Palestinian refugees and their descendants through the years over their “right of return” to historic Palestine (now Israel), knowing it was incompatible with any potential peace agreement.

Rachid’s remarks marked the first serious criticism of the U.N. initiative from the inner circle of the Palestinian leadership, past or present – though some current officials are also thought to have reservations. They coincided with the start of the U.N. General Assembly meeting in New York, where Abbas will make his case this Friday for an independent Palestine. A vote at the GA or at the Security Council could take weeks.

“It will not deliver anything practical for the Palestinian people,” Rachid said at a hotel lounge in London, where he has a home.

“I see it risking a lot: Risking the lives of the Palestinians, risking the Palestinian economy, risking even the legal structure of the Palestinian Authority,” he said.

Israel and the U.S. have both described the membership bid as a dangerous bypass of the Middle East peace process, while Congress has threatened to cut off aid to the Palestinians. Analysts warn that a drop in aid or in revenues Israel regularly transfers to the Palestinian Authority could cause its collapse.

“We are repeating the problems that occurred in the year 2000…when we lost the very good relations we had with the Americans, when we lost European support,” Rachid said. “We had 300,000 workers in Israel. But because we flexed our muscles to show we can do an intifada (uprising), 300,000 [Palestinians] lost their income.”

Rachid, 56, is a shadowy figure for most Palestinians. While working for Arafat, he operated mainly in the background, both in his interactions with Israelis and his financial dealings on behalf of the Palestinian Authority.

While he attended all the major peace parlays between the two sides, including the one at Camp David in 2000 that precipitated the second intifada, he played a more critical role as Arafat’s emissary to many of the back-channel talks with Israelis.

Former President Bill Clinton wrote in his biography My Life that Rachid was among the most “forward-leaning” negotiators on the Palestinian side.

After Arafat’s death in late 2004, Rachid moved from Gaza to Cairo and has since worked in business, including in Libya. An anti-corruption committee Abbas formed last year has summoned him for questioning about his role in the possible theft of Palestinian Authority funds, which Rachid denies.

Palestinian spokesmen did not immediately respond to queries about his criticism. One official who did not want to be named said Rachid was lashing out at Abbas in response to the graft investigation.

But Rachid said his criticism was entirely substantive. He agreed to be interviewed after much prodding.

Referring to years of peace talks with Israelis, Rachid said Palestinian leaders had deceived their people by publicly insisting on the right of millions of Palestinians classified as refugees around the region to return to present-day Israel -- while acknowledging at the negotiating table that a broad repatriation was unrealistic.

The “right of return” is one of the most sensitive issues in the Palestinian public discourse, regarded by many as near sacred. Records of negotiations over the years indicate that Palestinian leaders have pressed Israel to accept only a small fraction of the total refugee population, while negotiating compensation or resettlement packages for the rest.

Israeli leaders have rejected any repatriation except in humanitarian cases and in very limited numbers.

“We think we are cheating our people. We are cheating ourselves…. I was there on that team, in that room, in those meetings, so many times. I’m sorry, I have to tell the Palestinian people: We never demanded that you refugees will come to your homes or to your historical country [en masse], never. Anyone who tells you that…will be lying to you,” Rachid said.

“They [Palestinian leaders] are not prepared to hold themselves historically responsible for crossing some red lines on the Palestinian side, which at the top of the list is the right of return.”