In an interview with The Associated Press, Mohammed Dahlan also said the Palestinians misread the dramatic changes brought by the Sept. 11 terror attacks on the United States, and that hurt their aspirations of statehood.
It is rare for Palestinians to openly criticize the "intefadeh" despite growing misgivings among some, especially those whose lives have been severely disrupted by Israeli travel bans and military raids aimed keeping suicide bombers and gunmen out of Israel.
In Tel Aviv, a prominent leader of the uprising, Marwan Barghouti, said he had no regrets about the past three years. "To die is better than living under occupation," Barghouti told an Israeli court, delivering closing arguments in his murder trial. Israel accuses him of involvement in attacks that killed 26 Israelis.
"I am proud of the intefadeh. I am proud of the resistance to the Israeli occupation," Barghouti said, addressing the judges in fluent Hebrew.
Barghouti said he does not recognize the authority of the court because it represents the occupation.
Also Monday, Yasser Arafat's aides said the Palestinian leader has a severe case of the flu, as a result of which he has been unable to keep down food for three days and has sent for his personal physician, Dr. Ashraf al-Kurdi, who was en route from Amman, Jordan.
Several years ago, Arafat developed noticeable tremors in his lower lip. Doctors have said it was a nervous tic. Media reports have speculated he suffers from Parkinson's disease, a degenerative neurological disease.
Also Monday, there appear to be cracks in the ranks of a group of Israeli air force pilots who set off a storm by refusing to carry out missions in the Palestinian territories, reports CBS News Correspondent Robert Berger.
One of the 27 pilots has backed down, saying he reconsidered because of the harsh public outcry and the tough response of the air force, which grounded the conscientious objectors and threatened to throw them in jail. Some fellow pilots described the objectors, who are the first such group in the air force, as traitors. The repentant pilot has been reinstated by the air force.
However, another pilot, credited with downing an exceptionally high number of enemy planes, joined the protest group.
Defense Minister Shaul Mofaz on Monday said the pilots' actions had served to strengthen Palestinian terrorist organizations.
"A soldier has no right to refuse a legal order, and the IDF [Israel Defense Forces] issues only legal orders," Mofaz said.
The Palestinian uprising broke out Sept. 28, 2000, after Israel's then-opposition leader Ariel Sharon, now prime minister, visited the hotly contested Jerusalem holy site known to Muslims as Haram as-Sharif and to Jews as the Temple Mount.
Violent clashes followed, and grew into violence marked by repeated terror attacks against Israelis and Israeli military strikes into Palestinian areas. A total of 2,477 people have been killed on the Palestinian side and 860 on the Israeli side.
Anniversary rallies on Sunday and Monday were relatively muted and small in scale compared to previous years.
On Monday, about 3,000 supporters of the Islamic militant group Hamas, which has carried out scores of suicide bombings, rallied in Gaza City. A Hamas leader, Ismail Hanieh, said the group is ready to halt attacks on Israeli civilians "if the Zionist occupation stops killing civilians."
However, Hamas founder Sheik Ahmed Yassin said last week his group is not interested in a truce deal the incoming Palestinian prime minister, Ahmed Qureia, wants to negotiate with Israel.
Dahlan, who served as security chief under outgoing Prime Minister Mahmoud Abbas, said the Palestinians' first uprising, from 1987-1993, in which demonstrators faced soldiers with rocks and bottles, was much more effective than the current revolt. The first uprising "brought us back to our homeland," said Dahlan, who along with Arafat, returned from exile in the mid-1990s.
"We were in a better position (then) than we are now, politically and internationally," Dahlan told AP in an interview at his Gaza City office.
On Sunday, the Lebanese newspaper The Daily Star quoted Dahlan as saying that taking up arms was a mistake and harmed the Palestinians' national interest.
Dahlan said the Sept. 11 attacks were a turning point for the Palestinians. "We did not understand 9-11 in a correct and fundamental way that would have allowed us to help the national interest of our people, to bring back the international legitimacy of our (Palestinian) authority," he told AP.
Dahlan said Palestinian leaders did not respond quickly enough to the changed situation. He said he made recommendations to the leadership at the time but did not elaborate.
Other critics of the uprising have said suicide bombings and shootings weakened the Palestinians' international standing at a time when the West was becoming increasingly sensitive to the threat of terrorism.
Dahlan was security chief under Abbas, who stepped down after Arafat failed to relinquish control over security forces. Dahlan, who had the support of the United States, will not be in the Qureia government.