In this note we study the N=1 abelian gauge theory on the world volume of a
single fractional D3-brane. In the limit where gravitational interactions are
not completely decoupled we find that a superpotential and a fermionic bilinear
condensate are generated by a D-brane instanton effect. A related situation
arises for an isolated cycle invariant under an orientifold projection, even in
the absence of any gauge theory brane. Moreover, in presence of supersymmetry
breaking background fluxes, such instanton configurations induce new couplings
in the 4-dimensional effective action, including non-perturbative contributions
to the cosmological constant and non-supersymmetric mass terms.Comment: 18 pages, v3: refs adde