As Susilo Bambang Yudhoyono won the 2004 presidential election, it marked the end of Indonesia’s democratic transition era and experienced a dynamic change in foreign policy. The new international identity that viewed Islam as an asset was introduced by SBY, emphasizing the importance of moderate Islam as opposing extremism. The phenomenon of Islamic influence was not only the result of democratic consolidation domestically but also external factors such as the aftermath of 9/11 that portrayed Muslims as potential terrorists. For this reason, Indonesian foreign policy attempted to diminish such misconceptions and tried to be a peacemaker or a mediator in Muslim-related issues globally. To contextualize the analysis, the study focuses on the influence of Islam in Indonesian foreign policy towards the Palestinian-Israeli conflict and Pakistan. The mutual aspirations on the Palestinian statehood shared by both the government and the Muslim elements in society could be found, while religious sentiments were noticeable, as shown by the Muslim groups. In contrast, the influence of Islam in Indonesia-Pakistan relations, especially regarding the Kashmir dispute, was absent due to the difference in views of the government and the Muslim groups and constraining factors, including Indonesia’s national interest priority.