Something very important is happening that is changing the Middle East dramatically and perhaps permanently in a way no one expected: the decline of the Arab world, the development of a major conflict between Sunni and Shi'ite Arabs, and the rising power of Iran. Certainly, since the Iranian revolution of 1979, Arabs have worried about Islamist Iran becoming a major regional power. After all, that was a key reason behind the eight-year-long Iran-Iraq war, which included Gulf Arab oil-producing states giving Saddam Hussein billions of dollars to defend them, and then pleading for the United States and Europe to defend their oil tankers from Iranian attack. I well remember being in Amman back in 1982 when there was a sense of panic in the air as Iranian troops advanced into Iraq. People openly wondered where or whether Teheran's soldiers would stop. But the Iraqi troops held and six years later, Baghdad "won" the war - if no tangible gains coupled with massive losses can be called a victory. Since then, most Arab attention has been focused on Israel, Iraq itself, Osama Bin Laden and other Sunni terrorists, and purported Western enmity and American imperialist threats. As for Sunni-Shi'ite conflict, most Muslims denied there was any real problem, explaining this as merely one more phony issue raised by their enemies. Everyone got along just fine, thank you very much. But now the crisis is undeniable. One of the reasons for this situation is the Arab world's decline since its leaders are refusing to make necessary reforms whether they involve civil rights, economic changes, pragmatism, or moderation toward the West and Israel. The breakdown is apparent in virtually every country even though the regimes are still managing to use demagoguery, Arab nationalism, and the fear of Islamism to hold onto power. The Arab League summit conference in Khartoum, Sudan, was so insignificant it attracted no attention. The meeting failed to grapple in any creative way with reform, radical Islamism, the Arab-Israeli conflict, Iraq, Iran's nuclear drive, or any other issue. It even managed to avoid the crisis in Sudan where Muslim militias have killed thousands of Christians. Except for propagandistic - and pretty effective - exercises, there is no Arab world. Certainly, Egypt is providing no leadership. In fact, ask this question: what are the important powers in the Middle East nowadays? No Arab country comes to mind, only Israel, Iran, and the United States. A SECOND factor is, of course, the US intervention in Iraq which overthrew a stable albeit horrible regime and shook up the political power structure. Ironically, though, the real cause of the problem is not America but its enemies. After all, if the Sunni community in Iraq accepted a multi-cultural regime and negotiated the best possible deal the current inter-communal war would not exist. But three years of terrorism by Sunni on Shi'ite Muslims (though there have also been bloody reprisals in the other direction) have stirred up passions that might not end short of full-scale civil war. And the Sunnis will lose that war. By cheering on the terrorists, the Arab regimes have taken the side of the Sunnis against the Shi'ites - and Iraq's Shi'ite majority knows it. Saudi Arabia supplies money for the insurgents, Jordanians cross the border to fight, and Syria sponsors the terrorist war in every way. WHAT DOES Arab nationalism offer Iraq's Shi'ites, or the non-Arab Kurds for that matter? Nothing, except support for their enemies! In the face of this situation, why shouldn't Iraqi Shi'ites see Iran as an ally, though not as a master. Last year, the leader of the insurgency, al-Qaida's Abu Musab al-Zarqawi openly called for a jihad on Shi'ites, in effect denying that they were Muslims at all. There was virtually no condemnation of this shocking statement by Sunni Muslim clerics or political leaders in other Arab countries. Jordan's King Abdullah, far more politely, warned of a Shi'ite alliance of Iran, Iraq, and others that would threaten the Arab world. Now Egyptian President Hosni Mubarak added his views in an April 8 interview on al-Arabiya satellite television. Saying Iraq is already in a civil war he added, "I don't know how Iraq will pick up the pieces. Personally, I do not see how this can happen. Iraq is half destroyed." He then pointed out that Iran has influence over the Shi'ites in Iraq, which is certainly somewhat true, but concluded: "The Shi'ites are always loyal to Iran. Most of them are loyal to Iran and not to the countries in which they live." In other words he portrayed the Shi'ites as Iranian agents and traitors to the Arabs. This is simply unfair. Who does he think did most of the fighting and dying for the Iraqi army during the Iran-Iraq war? Of course, some Shi'ites do work for Iran - Hizbullah in Lebanon is a client of Teheran and there are groups like that being well-paid in Iraq, too - but most are not. In Iraq, most Shi'ites think they are as good or better Muslims than their Iranian counterparts and do not want them to be their bosses. Many are loyal to their community even if they are not pious. And they have always considered themselves to be good Arabs. By reading out the Shi'ites, and certainly by showing so little sympathy for them, the Sunni Muslims may be transforming an Iraqi civil war into a general Arab and Muslim civil war. And if Iraq's majority is being driven toward Iran, the Arab leadership and Sunni Islamists are largely to blame. If Iran gets nuclear weapons, this new power alignment will become even more evident and dangerous. The writer is director of the Global Research in International Affairs Center, editor of the Middle East Review of International Affairs and journal editor of Turkish Studies.