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The crescent used to be a symbol of the Byzantine Empire. After the Fall of Constantinople in 1453 it was taken as a symbol by the Ottoman Empire. The crescent is now often used to symbolize the Islamic faith. However, it should be noted that the crescent was not a symbol used for Islam by Muhammad or any other early Muslim rulers, as the Islamic religion is, in fact, against appointing "Holy Symbols" (so that during the early centuries of Islam, Muslim authorities simply didn't want any geometric symbols to be used to symbolize Islam, in the way that the cross symbolizes Christianity, the menorah was a commonly-occuring symbol of Judaism, etc.). This is why early Islamic coins were covered with Arabic writing, but contained no visual symbols.
Despite this mixed history, many Islamic nations and charities use the crescent symbol on their flags or logos (e.g. Pakistan, The Red Crescent, etc. � though currently none of the Arab states in Arabia or the Mashreq have crescents on their flags). In this manner it could be argued that its modern usage is meant to signify identity and, for devout Muslims, brotherhood.
Hallo dogfish, I found this under http://altreligion.about.com/library/glossary/symbols/bldefsstarcrescent.htm.
There's some interesting stuff here.
Star and Crescent
This emblem, commonly recognized as the symbol of the Islamic faith, has actually acquired its association to the faith by association, rather than intent.
The star and crescent symbol itself is very ancient, dating back to early Sumerian civilization, where it was associated with the sun God and moon Goddess (one early appearance dates to 2100 BCE), and later, with Goddesses Tanit and even Diana. The symbol remained in near constant use, and was eventually adopted into the battle-standard of the Ottoman Dynasty, who are mainly responsible for its association with Islam. As the Dynasty was also the policitical head of the faith, it was inevitable that their symbol would be associated with Islam as well. It should be noted that there is no mention of such a symbol in the Koran, the Holy book of Islam, nr is there any relationship between the crescent and star and the Prophet (whose flag was black and white, inscribed "Nasr um min Allah," "with the help of Allah.")
Today, the star and crescent is widely accepted as a symbol of the Islamic faith, and is used in decorative arts, jewelry, and national flags- much like the cross in Christian countries. It is associated with the use of the moon to time festivals. It is, however, not accepted by all Muslims- many Muslims consider it un-Islamic and even blasphemous.