Young Muslims are much more likely than their parents to be attracted to political forms of Islam, a think tank survey has suggested.
Support for Sharia law, Islamic schools and wearing the veil is much stronger among younger Muslims, a poll for the centre-right Policy Exchange found.
The report's lead author, Munira Mirza, blamed government policy for a growing split between Muslims and non-Muslims.
She said ministers should engage with Muslims as citizens.
The survey of more than 1,000 Muslims from different age groups in the UK, found:
* 71% of over-55s compared with 62% of 16 to 24-year-olds feel they have as much, if not more, in common with non-Muslims in Britain than with Muslims abroad
* 19% of over-55s compared with 37% of 16 to 24-year-olds would prefer to send their children to Islamic state schools
* 17% of over-55s compared with 37% of 16 to 24-year-olds would prefer living under Sharia law than British law
* 28% of over-55s compared with 74% of 16 to 24-year-olds prefer Muslim women to choose to wear the hijab
* 3% of over-55s compared with 13% of 16 to 24-year-olds admire organisations like al-Qaeda that are prepared to fight the West[/b]
Ms Mirza said the government should stop emphasising differences between Muslims and non-Muslims.
"The emergence of a strong Muslim identity in Britain is, in part, a result of multicultural policies implemented since the 1980s, which have emphasised difference at the expense of shared national identity.
"Religiosity amongst younger Muslims is not about following their parents' cultural traditions, but rather, their interest in religion is more politicised.
"Islamist groups have gained influence at local and national level by playing the politics of identity and demanding for Muslims the 'right to be different'."
The survey also showed 84% of Muslims believed they had been treated fairly in British society.
It shows the extent to which multiculturalism has failed
Survey's key points
Analysis of report
And 28% believed that authorities in Britain had gone "over the top" in trying not to offend Muslims.
The Department for Communities and Local Government said the Commission on Integration and Cohesion was looking into ways for communities to benefit from diversity and manage any tensions.
It is due to report back later in the year.
A department spokesman said: "From a period of near-uniform consensus on multiculturalism, we now face questions about how different groups can live side-by-side, respecting differences, whilst working together to develop a shared sense of belonging and purpose."
Conservative leader David Cameron said the poll was extremely worrying.
"It shows the extent to which multiculturalism has failed, because what the poll showed is that these young people feel more separated from Britain than their parents did," he told BBC News.
He said big changes were needed to break down barriers of extremism, uncontrolled migration, poverty and poor education.