So what was happening among the Arab populace of the Ottoman Empire during all this time? For starters, they were experiencing increased governmental control over their daily lives. Starting in the mid 1800s and continuing through the early 1900s, Sultan Hamid II did what so many leaders had already done over previous centuries – worked to consolidate power and increase control over the populace. Government bureaucracy expanded broadly, eventually gaining authority over all areas of society.
Starting in the 1880s, however, the European powers began increasing their influence in the region, weakening the Empire. Under European influence, the Ottoman Empire shifted from a traditional legal system to a Western one, creating new institutions throughout the Empire, institutions congruent with European one. The result? Increased European "investment" (i.e. the influx of capital and the ensuing capitalist relations).
Many political and intellectual movements started in the Ottoman Empire during the late 19th century, especially around decentralization. These movements changed significantly after the Young Turk Revolution of 1908. The Young Turks introduced a nationalist movement based on Turkish identity. In response, Arab intellectual movements previously demanding decentralized rule took on an early Arab nationalist ideology.
Arab members of the new Turkish Parliament expressed their frustration with the new government's continued expansion without increased accountability to the people. The accountability issue focused on Zionist settlement in Palestine – Arab members of Parliament accused the Turkish leaders of ignoring Palestinian Arab pleas of protest against Zionist expansion
The Young Turk's government didn't last more than a decade. In 1918, British forces won over Ottoman forces and set up a military administration in Palestine, ending 400 years of Ottoman rule. Two years earlier, the British and the French, planning for the aftermath of the war, had drawn up the Sykes-Picot Agreement – a pact that divided up the entire Middle East region into areas of British and French control. Simultaneously, as you'll remember, the British were drawing up post-war agreements with the Zionists (Balfour Declaration) and the Arab citizens of the Ottoman Empire (the McMahon-Hussein Correspondence).
There is significant controversy over just about every detail of the McMahon-Hussein Correspondence. Here's one version of the story: During the war, the Ottoman Empire had the ability to threaten two vital British interests – the Suez Canal and the head of the Persian Gulf (which contained valuable oil fields). So the British had great interest in gaining Arab support within the Ottoman Empire and supporting a revolt from within that could bring down the Ottoman military.
Arab citizens of the Ottoman Empire opposed to the Turkish leaders were deciding who to support in WWI – the British or the Turks. The way they saw it, if they were to fight for the Turks, they would gain more power within the Empire if the Turks won, but they would still be under Turkish rule. If they chose to revolt against the Turks with the military and political support of Britain, they had the opportunity to gain political sovereignty. But if Britain lost, the costs could be significant.
Sharif Hussein of Mecca, the governor over the holy cities of Mecca and Medina, bargained back and forth with Henry McMahon, the British High Commissioner in Egypt, for political support of independence in return for a revolt against the Turks. In 1916, McMahon pledged support, although the borders of what was to be the independent Arab state were not completely determined at the time. The correspondence did not result in a written treaty, but Sherif Hussein understood the letter as a formal agreement. In 1916, an army under Sharif Hussein's son, Faisal bin Al Hussein, led an armed revolt against Ottman forces, enabling the British forces to advance from Egypt into Palestine and Syria.
Once WWI ended, the British effectively went back on the McMahon-Hussein Correspondence - either denying it was ever binding or denying that Sherif Hussein had provided his half of the bargain. The British and French fought over control of various parts of the Middle East, with the whole thing finally being settled in 1920 at the San Remo conference. The newly-formed League of Nations empowered the British and the French to set up mandate governments throughout the region. Supposedly, they were given a kind of stewardship over the region – to hold power over the newly-established countries, create bureaucratic institutions, and slowly enable local leadership to emerge and establish national sovereignty. But basically, they were given the blessings of the other winners of WWI to draw boundaries and create states out of the region based on their own economic and political interests.