Daoud was best known for organising the attack in Germany that killed 11 Israeli athletes.
He was a leader of Black September, an offshoot of the Fatah faction of Yasser Arafat, the late Palestinian leader, that was established to avenge the 1970 expulsion of Palestinian fighters from Jordan.
Two Israeli athletes were killed in the assault, and nine others died in a bungled rescue attempt by the German police.
A German policeman and five Palestinian attackers also were killed.
Wave of assassinations
The assault led to a wave of assassinations of high-level Palestinian officials by suspected Israeli intelligence agents.
Daoud claimed responsibility for the Munich attack in his book Palestine, from Jerusalem to Munich, published in 1999.
|Oudeh called the Munich events a turning point for the Palestinian struggle [GALLO/GETTY]
A press release from his publishers at the time said Abu Daoud "admits full responsibility for organising and preparing the attack against Israeli athletes during the 1972 Munich Olympic Games".
Abu Daoud had repeatedly insisted that the Munich attack was "not a terrorist act".
"We were at war with Israel," he told Al Jazeera in 1999.
"Our aim was not civilian. We targeted athletes who in reality were Israeli officers and soldiers. Every person in Israel is a reservist."
In a 2006 interview with the Associated Press news agency, Oudeh said the Munich events were a turning point for Palestinians and rejected the term "terrorists" to describe Palestinian fighters.
"Before Munich, we were simply terrorists. After Munich, at least people started asking who are these terrorists? What do they want.
"Before Munich, nobody had the slightest idea about Palestine."
Lifetime of exile
Born in Jerusalem in 1937, Oudeh lived there until the 1967 Middle East war when Israel captured the eastern part of the city.
He was displaced and moved to Jordan where he joined the Palestine Liberation Organisation.
After the 1972 attack, Oudeh lived in eastern Europe and then in Lebanon until the Lebanon civil war broke out in 1975.
He went back to Jordan, and from there to Ramallah in the West Bank in 1993, after the Palestinians' Oslo peace accords with Israel.
But when his book on Munich came out, he was banned by Israel from returning to Ramallah following a trip to Jordan, and finally settled in Syria.