  We consider the role played by the 4f states in the rare-earth oxyarsenides
REOFeAs (RE=Ce,Pr,Nd) and the oxyphosphate CeOFeP, using a first-principles
technique that combines the local density approximation and dynamical
mean-field theory (LDA+DMFT). In the Pr and Nd compounds, the 4f states are
located well below and above the Fermi level E_F, and essentially do not
interact with the iron 3d bands located near E_F, resulting in local moment
behavior. In the Ce compounds, our results reveal a qualitatively different
picture, with the 3d-4f hybridization being sufficiently strong to give rise to
an observable Kondo screening of the local 4f moment. Our LDA+DMFT electronic
structure calculations allow us to estimate the Kondo temperature T_K for both
CeOFeP and CeOFeAs. For the phosphate, the order of magnitude of our estimate
is consistent with the experimental observation of T_K around 10 K. At ambient
pressure, T_K is found to be negligibly small for CeOFeAs. Under applied
hydrostatic pressure, we predict an exponential increase of T_K which reaches
values comparable to the superconducting T_c around 40 K at pressures above 10
GPa. We conjecture that the competition between the Kondo effect and
superconductivity may be at the origin of the monotonous decrease of T_c
observed in CeOFeAs under pressure. We argue that the quantitative aspects of
this competition are inconsistent with a weak-coupling BCS description of the
superconductivity in the oxyarsenides.
