The banning of a Singaporean Malay girl, Nurul Nasihah, in late February 2002 from attending school for wearing an Islamic headscarf in class raised protests not only from the Singaporean Muslim community, but also from the Malaysian Muslims. Although the Malaysian government distanced itself from the controversy, it did raise interest in the Malaysian newspapers and showed how sensitive the issue of religion and ethnicity really is, even if it occurs across the causeway. The ban is one of several measures undertaken by the Singaporean government that were post-September 11 aimed at integrating the three major ethnic groups there and promoting secularism in the republic. Furthermore, the arrest under the Internal Security Act (ISA) of Singapore's Jemaah Islamiyah (JI) members suspected of plotting massive attacks on the United States and its allies interest in the republic further raised speculation that the Singaporean government's intention to curb the rise of Muslim radicalism/terrorism in the republic was, in fact, against the Muslims.

The Malaysian government at the same time took several hard measures to contain the spread of Muslim radicalism in the country. The Mahathir administration decided to withdraw the annual grants received by the independent madrasah and several other independent Islamic schools known as the Sekolah Agama Rakyat (People's Religious School). These madrasah and independent Islamic schools received annual grants from the government through the state's Baitulmal (Alms Collection Agency) and Religious Affairs Department. The government blamed the madrasah and independent Islamic school for becoming centres of disaffection by instilling radical Islamic ideas that are not conducive to harmony in the multiracial society of Malaysia. Nonetheless, critics argued that the government's move was politically motivated since most of the madrasah schools affected have political inclination towards the opposition party, i.e. the Malaysia's Islamic Party or PAS. In addition, the Malaysian authorities also made several arrests of suspected members of Jemaah Islamiyah (JI) and other radical Muslim groups. They have been detained, like those in Singapore, under Malaysia's preventive law — the Internal Security Act (ISA).