ON THE BLODDY TRAIL OF SABRI AL-BANNA: Review

The most fascinating aspect of ''The Master Terrorist'' is Abu Nidal's shifting relations with his various sponsors - primarily Iraq, Syria and Libya, all of whom seek to exploit the Palestinian cause for their own ends - and his changing connections within the Palestinian movement itself. Mr. [Yossi Melman] also dwells at length on the June 1982 assassination attempt on Israeli Amabassador Shlomo Argov in London - a case study in Abu Nidal's methodology - which triggered Israel's long-awaited invasion of Lebanon. The author, who covered the shooting and subsequent trial of three captured terrorists, notes the irony that it may have been Mr. [Yasir Arafat]'s sworn radical enemy, Abu Nidal, who furnished Israel with the excuse to crush Mr. Arafat's political base. He quotes former Prime Minister Menachem Begin as brushing aside intelligence evaluations of the distinction between the groups with the statement ''There's no need for that. They are all P.L.O.'' and Gen. Rafael Eitan, the chief of staff, as adding, ''Abu Nidal, Abu Shmidal, they're all the same.'' He also explores the theory, favored by some Western intelligence analysts and backed up by some subsequent developments, that Iraq set up the murder to bring on the Israeli invasion, which in turn gave Baghdad a chance to call for an honorable halt in its long-running war with Iran to unite against a common enemy. Iran spurned the appeal.