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The United States should take the lead in mobilizing the financial resources of the international community to support a new and radical approach to foreign aid for Islamic countries. This approach – a shift from large‐scale aid to the countries themselves or in the form of massive state‐controlled projects, both managed by central governments – to smaller, community‐directed initiatives across countries – can reap dramatic benefits. There is strong evidence to suggest that supporting communities in achieving their selfdescribed goals will help secure the economic future of Morocco and Jordan, which are entering into a free trade era with theWest, will help resolve the seemingly intractable Israeli‐Palestinian conflict, and significantly further the economic and political reconstruction of Iraq and Afghanistan. As the local development process unfolds, it would marginalize secular and religious extremists, thereby strengthening international security. And by providing through this form of aid a vehicle for successful public diplomacy, the United States would foster an environment where mutual understanding on broader geopolitical issues is attainable. If realized, these profound benefits will be achieved by local communities creating prosperity through a pluralist democratic process. The United States and other nations should make funding of community‐initiated development in Islamic nations the highest priority, which can pave the way towards a new era of Islamic‐Western relations.