In 1970, Nasser died, and Anwar al Sadat took power in Egypt. He focused on Egyptian patriotism, often at the expense of solidarity with other Arab nations. His treaties with Israel in 1975 and 1979 were a disaster for the "Arab cause," and were viewed as a betrayal by Palestinians, many of whom had been the most adamant supporters of Egyptian-led Arab nationalism. Egypt moved from the center of the Arab movement to a place removed from the rest of the Arab world.

During this time, individual states functioned as political structures used to preserve stability in the region. State sovereignty, and to some degree, state patriotism, increased during this time. Leaders of Arab states focused on strengthening their own economies and on internal security.

In the wake of Arab nationalism, the 1980s and 1990s saw the rise of Islamic movements. "The failure of the nationalist model brought back the hope in Islam" (Houra, Walid). In the West's repression of Arab nationalism from the 1920s to the 1980s, they often supported Muslim leaders who preached a religious solidarity rather than a national one. The Islamic movements, which started after WWI, grew alongside Arab nationalism as a strong political force – often competing with the nationalist movement. The West viewed the Islamic movements as less threatening and thus actively supported their leaders against Arab nationalists, then against other rising powers in the region. Then, in the wake of Arab nationalism, new, stronger Islamic movements emerged no longer within the West's control. These movements are the primary target of United States military action today.

People point to many reasons for the decline of Arab nationalism. I think two are particularly important to point out. One –for its entire duration, Arab nationalism was basically in a war for its existence against the West, and later, against the Soviet Union as well. Without support from either of the world's superpowers, it was bound to lose. Two – Arab nationalists focused on the politics of identity, but never focused on the institutional questions: how to build effective government institutions that could unite their countries. Because the political system went undefined, the union never materialized.