The mausoleum complex consists of Arafat's burial chamber, a prayer pavilion and landscaped gardens - all situated in a 6,550 sq. m. site.
Modi pledged $40 million in aid to Palestine, during the first-ever visit by an Indian head of state to the West Bank.
Prime Minister Narendra Modi termed the award as an honour for the people of India.
Earlier in the day, Modi officially launched a project for the construction of the first Hindu temple in Abu Dhabi, describing the holy place as a "catalytic agent" of humanity and harmony that will become a medium of India's identity. In Palestine, he was given the highest civil honor by president Mahmoud Abbas when he was conferred the Grand Collar.
Modi said he is "proud to be renewing friendship and support to Palestine" and that his country "holds on to the nobility of the Palestinian people's interests" and hoped for establishing the independent Palestinian state by peaceful means. "Modi said that he was looking forward to the visit of French President Emmanuel Macron to India next month", External Affairs Spokesperson Raveesh Kumar tweeted.
Making a veiled attack at the Opposition, Modi said, "We have to bring India at a par with the rest of the world".
India has consistently voted in favour of resolutions supporting the Palestinian cause at global forums, an issue that has bothered strategic partner Israel. "The formation of a multilateral mechanism that stems or is produced by worldwide peace convention is the most ideal way to broker such negotiations", he said. They also signed joint statements, with both the leaders lauding each other as well as hailing India-Palestine relations.
Modi hailed his government's bold decisions like demonetisation and implementation of Goods and Services Tax (GST).
Prime Minister Modi thanked the Indian community for attending the event in large numbers and said that he was extremely touched.
Prior to arriving at the occupied Palestinian territories, Modi met Jordan's King Abdullah II in Amman.
In the UAE, he will meet Sheikh Mohammed bin Rashid Al Maktoum, the Vice President and Prime Minister of UAE and Ruler of Dubai, and Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi.
This is Modi's second visit to the UAE after August 2015.
PM added "Some 200 years ago, 94% of the world's one billion population lived in poverty".
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