Arab military defeats and economic crises fueled political Islam's resurgence. [causal]
What explains the resurgence of political Islam in the 1970s? Two factors are worth highlighting. The first is the defeat of a coalition of Arab militaries from Egypt, Syria, and Jordan in the Six-Day War against Israel in 1967. The defeat resulted in the loss of Sinai, the West Bank, Gaza, and East Jerusalem to Israel. It also generated widespread frustration in the Middle East with the leadership of Arab nations and the inability of existing political regimes, including those grounded in secular nationalism, to exert power against Israel and Western interests. The second is the major economic crisis that swept through the Middle East in the 1970s and that capitalist economic systems seemed powerless to handle. The perception emerged that existing regimes were failing because they relied too much on Western political and economic models. Calls for a return to Islam and the establishment of Islamic states grew louder.
XREF: Connects to broader literature on how failed secular nationalist regimes across the postcolonial world gave rise to religious and ethnic revivals.
Green, Todd H, The Fear of Islam_ An Intro…, loc. 250