Democracy promotion has become a ‘big business’ for foreign policy makers and is generally assumed to foster global peace, political liberty and prosperity. Democratization is closely linked to the process of state-building and liberal peace- building, and is often regarded as a universal ideal which guarantees peace and freedom. This assumption rests on the claim that liberal democracy is the best and foremost political system there is and that freedom is best achieved in liberal democracies. Democracy without the ‘liberal’ prefix remains unchallenged in the current governments of the regimes of today. However, there is no clear recipe for a democratic system and no universally accepted form of democracy. This thesis presents a critical assessment of the universality of the Western classical concept of liberal democracy and analyzes its contextual challenges in the Middle East. I examine the theoretical foundation for classical liberalism, rooted on John Stuart Mill, and the modern political liberalism, building on John Rawls, which reflect the core values of modern political democracies. I argue that the strong emphasis on individual freedom and the secularization of politics are challenged in the Middle Eastern context. To many Arabs this liberal state is perceived as a threat to their societies when democracy promoters imply that liberal democracy is the only legitimate, good society. Democracy is in a poor state in the Middle East and the region has had a decline in freedom the last few years. I give an account of the position of democracy and the future prospects for political change in the region. The lack of political will and democratic understanding of the incumbents in power is argued to slow down the pace of democratic reforms, as well as the general hostility towards ideology from the West. I suggest that the main challenges of exporting the classical liberal democracy to the Middle East can be seen as the different conceptions Arabs and Westerners have of democracy and freedom, something which is only strengthened by the misperceptions they have of each other. I have therefore argued that we should reconceptualize, or rather de-Westernize, democracy in order for it to fit into the Middle Eastern context and not be seen as a demoralizing, hegemonic concept of Western imperialism. There is reason to believe, according to recent global surveys, that the majority of Muslims embrace their conception of the democratic ideal. I postulate that an Islamic version of democracy can be a good way of reconciling the differences between the West and the Arab world, where the liberal ideals of individualism and secularism are not given such a central position in the foundations of the state as in the West.