The Archbishop was speaking to 150 Christians at a BibleLands conference at Lambeth Palace to raise awareness of the plight of Christians in the Holy Lands and explore ways in which Western Christians can offer greater support.
In his address, Dr Williams warned that indigenous Christian communities right across the region had come under "appalling pressure" as a result of American and British global projects.
"Communities that have a history of coexistence have suddenly become antagonistic," he said, adding that the fall out had been the mass migration of Christians out of the region.
"At present, in the short-term, the pressures on so many of our Christian brothers and sisters in the Middle East are well nigh intolerable," he continued. "Migration, which in the 19th and early 20th century was a positive thing for Christians in the Middle East ... has now become a desperate measure to get away from an unbearable situation."
Dr Williams alleged that the ignorance of many Brits concerning the history and present situation of Christians in the Middle East had led to "unrealistic and unconstructive policies on both sides".
"I am aware of how much ignorance there is in our country and culture generally about Christians in the Middle East," he told the audience. "Even, dare I say, at the level of Government, it is remarkable how many people you come across who think that Christians arrived in the Middle East about 100 years ago."
Dr Williams urged Western Governments to recognise the effect that their foreign policy decisions were having on the region, and work to safeguard a plural Middle East in order to prevent radical forms of Islam from taking root.
"It is crucially important for the health of the region and the world that we don't assume that 'Arab' and 'Muslim' are equivalent terms," he said.
The history of Christian communities in the Middle East suggested, Dr Williams said, that Christians had the capacity "to be a presence that is creative and positive" in the Arab world.
"I would say that is what we must pray for and work for. If that is not the case, we do run the risk of a monochrome Islamic Middle East ... dominated by forms of Islam that are unfriendly to the Western world.
"We need to see a democratic, argumentative, interactive, creative society in that region, which will only come if all religious communities there - Christians, Muslims and Jews - are able to engage in that way."
