The modern age brought radical technological and organizational changes to Europe and Islamic countries found themselves less modern when compared to the many western nations. Europe's state-based government and rampant colonization allowed the West to dominate the globe economically and forced Islamic countries to question change.

Some Muslim territories, for example Syria, were granted at least nominal independence after the end of the First World War and some gained full independence after the second. Many Muslim countries sought to imitate European political organization and nationalism began to emerge in the Muslim world. Countries like Egypt, Syria, and Turkey organized their governments with definable polities and sought to develop national pride among their citizens. Other places, like Iraq, weren't as successful due to a lack of unity.

Some Muslim countries, such as Turkey and Egypt, sought to separate Islam from the secular government. In other cases, such as Saudi Arabia, the new government brought out new religious expression in the reemergence of the puritanical form of Sunni Islam known to its detractors as Wahhabism which found its way into the Saudi royal family.

During the 18th century, Muhammad ibn Abd al Wahhab (1703–1792) led a religious movement (Wahhabism) in eastern Arabia that sought to purify Islam. Wahhab wanted to return Islam to what he thought were its original principles as taught by the as-salaf as-saliheen (the earliest converts to Islam) and rejected what he regarded as corruptions introduced by Bida (religious innovation) and Shirk (polytheism). He allied himself with the House of Saud, which eventually triumphed over the Rashidis to control Central Arabia, and led several revolts against the Ottoman empire. Initial success (the conquest of Mecca and Medina) was followed by ignominious defeat, then a resurgence which culminated in the creation of Saudi Arabia.

The partition of India refers to the creation in August 1947 of two sovereign states of India and Pakistan. The two nations were formed out of the former British Raj, including treaty states, when Britain granted independence to the area (see Undivided India). In particular, the term refers to the partition of Bengal and Punjab, the two main provinces of the would be Pakistan.

In 1947, after the partition of India, Pakistan became the largest Islamic Country in the world (by population). Today, Pakistan is still the second largest Islamic Country in the world. Pakistan is presently the only nuclear power of the Muslim world and is one of the more developed nations among the Muslim countries.

Indonesia is the largest Muslim country in the world, by population.

The Arab-Israeli conflict spans about a century of political tensions and open hostilities. It involves the establishment of the modern State of Israel as a Jewish nation state, as well as the relationship between the Arab nations and the state of Israel (see related Israeli-Palestinian conflict). Despite involving a relatively small land area and number of casualties, the conflict has been the focus of worldwide media and diplomatic attention for decades. Many countries, individuals and non-governmental organizations elsewhere in the world feel involved in this conflict for reasons such as cultural and religious ties with Islam, Arab culture, Christianity, Judaism, Jewish culture or for ideological, human rights, or strategic reasons. While some consider the Arab-Israeli conflict a part of (or a precursor to) a wider clash of civilizations between the Western World and the Arab or Muslim world[13][14], others oppose this view.[15] Animosity emanating from this conflict has caused numerous attacks on supporters (or perceived supporters) of one side by supporters of the other side in many countries around the world.

Between 1953 and 1964, King Saud re-organized the government of the monarchy his father, Ibn Saud, had created. Saudi Arabia's new ministries included Communication (1953) Agriculture and Water (1953), Petroleum (1960), Pilgrimage and Islamic Endowments (1960), Labour and Social Affairs (1962) and Information (1963). He also put his Talal, one of his many younger brothers (by 29 years his younger) in charge of the Ministry of Transport.

In 1958-59, Talal proposed the formation of a National Council. As he proposed it, it would have been a consultative body, not a legislature. Still, he thought of it as a first step toward broader popular participation in the government. Talal presented this proposal to the king when the Crown Prince was out of the country. Saud simply forwarded the proposal to the ulama asking them whether a National Council was a legitimate institution in Islam. The idea seems to have died in committee, so to speak. It would be revived more than three decades later. A Consultative Council came into existence in 1992.

Meantime, the Organization of Petroleum Exporting Countries came into existence in 1960. For the first decade or more of its existence, it was ineffectual in terms of increasing revenue for member nations. But it would have its day. Tension between Faisal and Saud continued to mount until a final showdown in 1964. Saud threatened to mobilize the Royal Guard against Faisal and Faisal threatened to mobilize the National Guard against Saud. It was Saud who blinked, abdicating and leaving for Cairo, later Greece. He would die there, in 1969. Faisal then became King.

In 1967, Israel won a whirlwind conflict in six days. In response, Arab leaders (including King Faisal) held a conference in Khartoum in August. They all agreed on three negative slogans with respect to Israel: "no recognition, no negotiations, no peace." Faisal agreed that Saudi Arabia would use some of its oil wealth to finance the "front-line states," those that bordered Israel, in their struggle.

The 1967 war had other effects. It effectively closed the Suez canal, it may have contributed to the revolution in Libya that put Muammar al-Qaddafi in power, and it led in May 1970 to the closure of the "tapline" from Saudi Arabia through Syria to Lebanon. These developments had the effect of increasing the importance of the petroleum in Libya, which is a conveniently short (and canal-free) shipping distance from Europe.

In 1970, it was Occidental Petroleum which constituted the first crack in the wall of oil company solidarity in dealing with the oil producing nations; specifically, in this case, with the demands for price increases of the new Qaddafi government.

In October 1973, another war between Israel and its Muslim neighbors, known as the Yom Kippur War, got underway just as oil company executives were heading to Vienna, Austria, site of a planned meeting with OPEC leaders. OPEC had been emboldened by the success of Libya's demands anyway, and the war strengthened the unity of their new demands.

The centrality of petroleum, the Arab-Israeli Conflict and political and economic instability and uncertainty remain constant features of the politics of the region.

While the events chronicled above were underway, the Shah of Iran was pressing (what he considered to be) the modernization of his country. For example, in the white revolution of 1963 he abolished the feudal system of land ownership, and in the process reduced the income of some of the Shia clergy. The Shah's critics at the time said he was trying to secure his hold on power. By 1966, he had become more aggressive in his own dealings with the oil companies.

A decade later, the Shah decreed women's suffrage and replaced the lunar (Islamic) calendar with the solar calendar for official use in 1976. Both moves alienated Shia clerics. These were among the conditions for the Iranian revolution of 1978-- 1979, which deposed the Shah and put Ayatollah Khomeini in power in Iran.