I've been doing research into the history of the Oslo Accords and I often see the claim that the PLO's decision to back Saddam (and the fallout from that after Saddam was defeated) was what forced them to the negotiating table with Israel in regards to the Oslo Accords. However, I cannot find any good sources for this claim other than a educated guess based upon Kuwait's expulsion of Palestinians and many Arab states reducing support for the PLO. Are there any good academic sources on this, and the state of the PLO from 1980-1995 and their decision to negotiate with Israel?
Absolutely! This is a really interesting subject, because it is in my opinion quite understudied. We hear often of the involvement of large, international players, such as the EU, US, UN, or Soviet Union (and later Russia to a much smaller extent), in the Arab-Israeli conflict historically and in recent years. In my experience, while there is plenty of information on intra-Arab disputes, there is also less general awareness of how these disputes (and how general Arab support for the PLO's various groups and the PLO as a whole) affected the development of the Arab-Israeli conflict. The PLO, after all, eventually grew to be largely dominated by Fatah, but the process up to that point relied on consensus decisions made in a variety of different processes, which was hampered by the variety of competing influences in the PLO (such as the tugging between Fatah, the PFLP, etc.).
When it comes to the question of the Gulf War, the question comes up in the context of how Arafat's choices during the war affected the Palestinian position internationally and generally. This effect was more important than many realize, according to many insiders. Now let me break down the mechanisms for the effects:
Expulsion, and other hard measures.
Financial measures, and reduced sympathy.
Effects on personal outlooks of leaders.
International diplomatic support.
Now let me break these down and expand on how they played out!
Some, like Philip Mattar in Middle East Journal, have argued that the Gulf War was one of the biggest setbacks for the PLO in history. His argument was based on all four of the aforementioned factors. Mattar walks through the reaction of the PLO (which it claimed was "distorted"), noting that its official position was slightly muddied, but informal statements from leadership of various groups was sufficient to heavily damage its image. While some were aware, within the PLO, that speaking out in favor of the invasion might be harmful, the majority and Arafat himself chose to praise Saddam during the invasion.
I'll skip the rationale he raises, and move to the costs themselves. Among them, broken down into the categories:
Kuwait - Palestinians had long suffered restrictions in Kuwait, as in many other Arab states. However, its wealth as a state trickled to them, and they could pay "taxes" to the PLO. There were 350,000 Palestinians in Kuwait in 1990, and more than half left by December 1990. Following the end of the invasion, Kuwaiti authorities arrested hundreds of Palestinians, tortured them, and killed many. Flight continued, and so did restrictions even further on work. The community lost an estimated $8 billion in income and assets. 90% of Palestinians left or were expelled. This effect rippled outwards to Jordan, since the Kuwaiti Palestinians were then a burden on the Jordanian economy, where many fled, and that means that the PLO lost a source of revenue, expatriate support, and an ally was weakened as a result.
Financial support - This was greatly reduced as a result. The PLO calculated, according to Mattar, aid from Saudi Arabia ($72m), Iraq ($48m), Kuwait ($24m), and another $50m in the "tax" on Kuwaiti Palestinians. This also leaves out remittances and other assistance. The money was frozen following the war, though it did eventually resume.
Personal outlooks - This relates more to the way the PLO reacted to these problems. Not only did they affect PLO interactions with the Arab world, they also affected willingness to seek peace. Shimon Peres, for example, believed that Arafat was desperate for a political "win" given the political beating lingering following the Gulf War (Avi Shlaim mentions this, for example). Arafat also appeared to have been leveraged, at least a little bit despite fierce resistance, into developing more democratic/state institutions to secure financial aid to replace the Gulf aid. Others paint him as desperate for peace because he was so diplomatically isolated (see Rubin and Rubin, Yasir Arafat). You may want to keep in mind that while I'm deliberately avoiding the First Intifada to avoid digressions, the result of that Intifada was also quite important in determining what Arafat saw as possible, what he had money for, and what he thought he needed to solidify control over the Palestinian population as their national leader.
International support - This effect was tied heavily into 3, as I mentioned already. The lack of championing and patron support meant significantly less support at various points in international forums. This lasted for very little time, and the Arab states called his bluffs to make a scene. For example, at the 1991 Islamic summit, while Saudi crown prince Abdallah basically prevented Arafat from hugging him. They refused to reiterate pro-Palestinian resolutions, and when he threatened to walk out of the summit, they called his bluff, and he stayed.
These are the two cites for the full sources I used that I think can give you a good start:
Philip Mattar, "The PLO and the Gulf Crisis", Middle East Journal, https://www.jstor.org/stable/4328660
Barry Rubin and Judith Colp Rubin, Yasir Arafat: A Political Biography: A Political Biography (2003)
Shlaim mentions the desperation claim here.