The history of the crusades is usually sold as the titanic clash of religions and civilizations, however I've recently read a different view that, since the Islamic powers had broken down in the decades leading up to the first Crusade, there was not much for Islamic unity. Therefore, when the Europeans came to conquer Jerusalem, the Muslims largely saw it as some barbarians who came over the frontier. Dangerous, but not a threat to their religion or culture. So my question is, is this true? Is the story we've been told of a mighty clash between the crescent and the cross solely how the Christian west has viewed it?
To begin with, yes. Later on, decidedly not.
The Levantine coast was not exactly the heartland of the Islamic world, and the First Crusade was extremely well-timed when it came to Islamic interest in recovering the region. The Seljuk Empire was beginning to collapse following the recent deaths of both Nizam al-Mulk and Malik-Shah; and I believe that the Fatimid caliph had also recently died.
Syria and Palestine were nominally under Seljuk control, but in reality they had become a collection of competing statelets. Fervour for religious war had largely vanished in this part of the world, with the concept of a constant jihad with only temporary truces having been replaced by such innovations as the House of Peace, largely resulting from the lack of tenability of a constantly expanding Islam following the crumbling of the Caliphate.
So while there was something of a response against the Crusaders from the post-Seljuks statelets of the region, this was fairly muted; the Crusader states were just seen as another player in the region. Indeed, alliances between the Islamic statelets and the Crusaders were fairly commonplace in the early years. The Seljuks themselves were more concerned with shoring up their own personal power in their heartland of Iran, and the Caliph in Baghdad had made little response. The Fatimids were also firmly in decline at this stage. With the exception of unheeded figures such as the preacher al-Sulami, there was little desire to put aside power-politics to create any kind of unified front.
However, by the time the 1140s come around, the situation has changed somewhat. The Levant has largely been unified under the flag of Zengi, a particularly brutal ruler primarily concerned with expanding his own power-base at the expense of local Islamic rulers. Despite not being an especially pious ruler, he saw an opportunity to use the ideological draw of holy war to expand his power by seizing Edessa from the Crusaders in 1144 (the date may be wrong, my memory eludes me), shortly before the end of his rule.
His realms were split upon his death, with one son gaining his main Iraqi and Kurdish provinces and his other son, Nur ad-Din, gaining Aleppo and his Syrian lands. Nur ad-Din, lacking a great number of potential expansion routes in the east, relied far more heavily on jihad and the concept of a righteous struggle in order to expand his power in the west. He was really the first main drive of a renewed jihad movement, theoretically drawing much closer to the "mighty clash between the crescent and the cross" you reference- although, again, the extent to which his actions were driven by genuine piety or pragmatic self-interest is debatable.
Well, whatever the reasons, from this point onwards jihad, holy war and a pious image became a vital part of the expansion policy and ideological basis of the Muslim rulers in Syria and Egypt. Muslim Aleppo and Christian Jerusalem actively competed to take Egypt from the dying, Shi'ite Fatimids; the former won out, and a kind of shaky state in Syria and Egypt was formed, with the former directly ruled by Nur ad-Din and the latter ruled by the famous Salah ad-Din, or Saladin, in Nur ad-Din's name. Upon Nur ad-Din's death, Saladin seized Syria from Nur ad-Din's successors and created a more unitary state under the Ayyubid dynasty.
Although Saladin's territorial ambition was more wide-reaching than simply taking back the Levantine coast, he did use this as a major justification for his actions (Muslim states being attacked in the name of Islamic unity and so forth) as well as the public image he cultivated of a pious jihadi. And he did indeed eventually attack the Crusader states, leading to the recapture of Jerusalem and the Third Crusade.
So, in summary (and bearing in mind that I haven't covered the 13th century here, as my knowledge of the Mamelukes is severely deficient), at first your assertion is mostly correct. Syria and Palestine were turbulent regions de facto ruled by competing statelets uninterested in Islamic unity, which was a great boon to the early Crusaders. As time went by, however, and stability was restored to the region, religious ideology and unity became much more prominent and relevant- although whether this was simply a power-play by the region's rulers to gain more territory and influence or a genuine show of Islamic piety is up for debate.
The best book on this, by the way, is Carole Hillenbrand's "The Crusades: Islamic Perspectives". I believe that the author Amin Maalouf has also written some well-regarded pop-history on the Islamic view of the Crusades, but I haven't read it and thus can't comment.