Ayman Abu Aita, a shopkeeper from Bethlehem, was interviewed by Cohen in the guise of his eponymous gay Austrian fashion journalist.
During the segment, in which Bruno tries to be kidnapped in order to become the 'most famous Austrian since Hitler', Mr Abu Aita is labelled as a member of the al-Aqsa Martyrs' Brigade, the armed wing of Fatah, in a caption.
Baron Cohen later appeared on the Late Show with David Letterman on CBS when he said he had feared for his life during the interview with Mr Abu Aita and that he had contacted intelligence agencies to help set up an interview with a 'terrorist'.
But a lawsuit filed at the District of Columbia federal court says the interview took place at a hotel in the Israeli-controlled West Bank.
Mr Abu Aita, a member of the board of the Holy Land Trust, non-profit organisation working on Palestinian community-building, said his 'good reputation for honesty and a peaceable nature' had been ruined.
His US lawyer Joseph Peter Drennan said: 'This is an important lawsuit because it is about the dignity of a specific person. It is about his reputation, about his standing in the community.'
Baron Cohen, Letterman, producers NBC Universal and Bruno director Larry Charles are all named in the lawsuit.
During the segment, in which Bruno tries to be kidnapped in order to become the 'most famous Austrian since Hitler', Mr Abu Aita is labelled as a member of the al-Aqsa Martyrs' Brigade, the armed wing of Fatah, in a caption.
Baron Cohen later appeared on the Late Show with David Letterman on CBS when he said he had feared for his life during the interview with Mr Abu Aita and that he had contacted intelligence agencies to help set up an interview with a 'terrorist'.
But a lawsuit filed at the District of Columbia federal court says the interview took place at a hotel in the Israeli-controlled West Bank.
Mr Abu Aita, a member of the board of the Holy Land Trust, non-profit organisation working on Palestinian community-building, said his 'good reputation for honesty and a peaceable nature' had been ruined.
His US lawyer Joseph Peter Drennan said: 'This is an important lawsuit because it is about the dignity of a specific person. It is about his reputation, about his standing in the community.'
Baron Cohen, Letterman, producers NBC Universal and Bruno director Larry Charles are all named in the lawsuit.
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