Yes, the Muslim world was for a long time well advanced of the West. It is worth noting though that there were significant periods where rights of religious minorities were well respected and times when they weren't. Even when religious minorities were doing reasonably well though they were often treated as a lower class of citizen with diminished rights. It also seems that you are considering the Islamic world to be a coherent and unified group which is far far from the truth. There have always been groups of the live and let live variety and groups of the kill the infidel variety.One important thing to bear in mind. The Muslims ruled the "Holy "Land" for centuries and they were the guardians of all the Holy religious sites in and around what is now known as Israel, Gaza, The West Bank, as well as neighbouring countries such as Syria, Jordan, Lebanon, Egypt and places afar afield as Mesopotamia and Persia. Remember that these Holy places of worship whether they were Jewish, Christian or Islam were preserved and not torn down. The Jews and Christians were allowed to pray and visit those sites all through the early and middle ages. Although a number of Jews and Christians left the Middle East for richer pastures, be it in Western or Eastern Europe, those who stayed on were free to do so and not discriminated to the extent as the Jews who immigrated to places as far as Russia, Germany, Spain and The United Kingdom. The Moors traded with the Christians in places like Spain, and even embraced Christians and Jews in their palaces in positions such as financial advisers, and scholars. Remember that when the Moors were driven out of Spain, many of their mosques were converted into churches. It is only in recent years that the extremist Islamic clerics declared a Holy Religious Jihad that was unheard of previously except during real battles such as the ones between the Crusaders and The Moors.
In case you missed it, in 1948 the UN created two states, one became Israel and the other became part of Jordan/Egypt.Coincidentally, this call by the extremist clerics only seem to happen when the Rest of the Western World decided to endorse Israel's rights, and sadly not those of the Palestinians. The rest is History.
If you want a more in depth analysis on the spread of modern extremist Islam, the Saudi region being the home of Islam's holiest sites has for a long time been a hotbed of religious zealotry. Around the end of the 19th century, they discovered this thing called oil which turned the petty clan chiefs into multimillionaires allowing them to spread their particular view on Islam.