Last month a group of Arab intellectuals released their third report in an unprecedented study of the many failures--economic, social, and political--that plague the world's Arab states. The latest report, "Towards Freedom in the Arab World," endorses democracy and laments the "acute deficit of freedom and good governance" in Muslim countries. Its authors are getting high marks from the Bush administration. Too bad they've largely ignored the most basic freedom under any democratic government: the guarantee of religious liberty.

Commissioned by the United Nations, the Arab Human Development Report has lots to say about the problems of autocratic rulers, bogus elections, restrictions on the media, and women's second-string rights. It lays out seven nonnegotiable guarantees for the transition to democracy, including the right to vote, the freedom to join organizations, and the right of political leaders to campaign. And of course it's true that these elementary rights are still hard to come by in the Arab world: In Egypt, political parties can't be established without government consent. Jordan controls most media outlets and heavily restricts freedom of assembly. In Algeria, women are treated as minors under the legal guardianship of their husbands.

But what the report virtually ignores is the centrality of religious freedom among the bedrock democratic rights. That omission troubles reformers such as Radwan Masmoudi, president of the Washington-based Center for the Study of Islam and Democracy. "Lack of freedom in Muslim countries is stifling societies," he says. "The solution is to allow liberal Islam to grow, which means radically expanding freedom of the press, freedom of religion, freedom of thought, and freedom to form independent organizations."

True, the report's authors endorse the idea of an independent civil society, where groups may criticize government and offer alternative policies. This civic realm, they say, "must be absolutely free from control." They also insist that government should "protect the right of people and groups not only to worship as they wish, in private; but also to promote their values publicly in civil society." There's even frank talk about the way political leaders have "selectively appropriated Islam" to justify oppressive policies.

Yet these themes occupy just a few pages in the 248-page report (criticism of the U.S. occupation in Iraq, for example, gets much more attention). Nowhere is there a direct challenge to the extreme interpretation of sharia, or Islamic law, current in states such as Iran, Sudan, and Saudi Arabia. Nowhere do the authors address the problem of the second-class status of religious minorities throughout the Middle East.

The same omission marked a recent panel discussion of the U.N. report at the Carnegie Endowment for International Peace. Rima Khalaf Hunaidi, the U.N. assistant secretary general who chairs the group's advisory board, called for "comprehensive reforms" of political and economic systems in Arab countries. But she spent almost as much time complaining about Israel's treatment of Palestinians. None of the four panel members tackled the dearth of religious freedom under Muslim rule.

Saudi Arabia is perhaps the worst offender. Under its Wahhabi version of sharia, criticism of the government, Islam, or the ruling family is forbidden. Even on paper, there is no freedom of religion: The law requires that all citizens be Muslims. Non-Muslims officially may worship in private, but fear arrest and persecution. Even Sunni and Shia Muslim communities with long histories in Arabia are treated with contempt.

In Sudan, the Arab regime has waged a ruthless 20-year campaign against Christians and animists in the south; more recently it has helped renegade militias commit genocide against African Muslims in the west. In Egypt--despite a government-controlled press drenched in anti-Semitism--religious minorities generally fare better. One reason for this is the social strength of the Coptic Christian community, which dates back to New Testament times and now numbers at least five million, making it the largest Christian community in the Middle East. Still, converts to Christianity have been tortured by security officials.

Indeed, apostasy laws, which criminalize conversion out of Islam, remain a grave matter in the Muslim world. In Saudi Arabia, any convert from Islam faces a death penalty. Nigeria, despite its constitution, has approved new sharia laws that authorize the killing of apostates. When severe legal penalties are lacking, a culture of threat and persecution often stands in the gap. Even in states with constitutional protections for religious minorities, these minorities' "dhimmi" status denies them a range of civil and political rights--from eligibility for employment in government posts to rights of redress in state-run courts.

"Two distinct historical experiences characterize the native Christian communities of the Middle East and Arab world: the dhimmi and the free," writes Habib Malik, a professor and human rights expert at the Lebanese American University. "Over 90 percent of the 10 million or so Christians of Arab lands are dhimmis and have never known a free and equal and dignified existence." The same might be said of minority Muslim groups living under Islamic governments, whether Sufis in Iran or Ahmadis in Pakistan.

Nevertheless, most Islamic leaders and institutions--and now the scholars of the Arab Human Development Report--seem to have sworn an oath of silence about the problem of religious oppression, especially the plight of Muslims who challenge state orthodoxy on religious grounds. The lack of religious liberty prevents debate over the meaning of Islamic texts--a crucial step in offering a progressive interpretation of Islam. For all the talk of a "freedom deficit," the authors of the U.N. report fail to recognize the unique status of religious expression. They thus see no connection between the denial of religious rights and the political and economic stagnation of most of the world's 22 Arab states. Their two previous reports, which examined economic and educational issues, were similarly silent on the point.

"Freedom of religion is the only way to build a strong, moral society," says Radwan Masmoudi, "where people can deal with each other with dignity, respect, trust, and fairness." Progressive thinkers such as Masmoudi advocate "liberal Islam," which considers freedom of conscience a sacred right as well as a central democratic doctrine. They argue that Muslims must recover the Koranic teaching that human beings are created free, and that violations of basic liberties--including freedom of worship--contradict human nature and the will of God.

A hopeful example is that of Lebanon, where there is no state religion and the constitution protects religious expression. Moreover, the recent withdrawal of Syrian troops could help liberalize Lebanon's struggling democracy. Though Muslims now make up about 70 percent of the population, the country is religiously diverse: Muslim groups share power with the historically influential Maronite Christians, and there are significant numbers of Greek Orthodox, Copts, Assyrians, and Baptists. A State Department report from 2002 noted that Lebanon's "religious pluralism and climate of religious freedom have attracted many persons fleeing alleged religious mistreatment and discrimination in neighboring states."

The Arab world needs a prosperous, democratic state that respects its religious diversity--perhaps a Muslim equivalent of the Pennsylvania colony, circa 1774, that so impressed James Madison. Writing to his friend William Bradford, Madison praised the connection between democratic stability and religious pluralism that was missing in his native Virginia. "You are happy in dwelling in a Land where those inestimable privileges are fully enjoyed and the public has long felt the good effects of their religious as well as Civil Liberty," he wrote. "Religious bondage shackles and debilitates the mind and unfits it for every noble enterprise."

That seems an apt warning for political reformers in the Arab world. For until the culture of religious repression is decisively challenged, it's hard to imagine an "Arab spring" that would survive the summer heat of the dictators and theocrats in waiting.

Mr. Loconte is a research fellow in religion at the Heritage Foundation and editor of "The End of Illusions: Religious Leaders Confront Hitler's Gathering Storm" (Rowman & Littlefield). Grace Smith provided research support for this article.