This chapter discusses how, misled by Islamophobic propaganda, Britain and America were unable to come to terms with what they called ‘Islamism’. The origins of what is variously known as Islamism, Islamic fundamentalism, and radical Islamism lie in the 1960s, in the ideas of a handful of Muslims in Pakistan, Egypt, and Iran who believed that Muslims had been led astray from their religion by nationalist movements. Although some Muslims were critical of Western morality and politics, Islamism was not primarily anti-Western: it was essentially a reaction against what were widely seen as the corrupt, authoritarian, and secular regimes that controlled much of the Muslim world. The aim was to evict them, return to a purer form of Islam and re-create an Islamic state. In view of the exaggerated reputation it enjoys in the West, it is worth remembering that this movement has largely been a failure. Yet while fundamentalism appeals to only a small minority, it is also the case that large numbers of Muslims have become aggrieved by the policies of the Western powers. The explanation for this can be found in long-term frustration with the consistently pro-Israeli policy of Britain and the United States over Palestine, in addition to the proximate causes in the shape of two Afghan wars, the genocide in Bosnia, the Rushdie affair, and the first Gulf War in 1990, which made many Muslims see themselves as the victims of Western aggression and interventionism.