"If you look at the opponents of the Iranian regime, [say] the green movement - that clearly represents a young, liberal, modernizing spirit that exists in that country," Rushdie told The Big Think.
"And in every Muslim [state] you will see that. You will see particularly young people. They don't want to live according to the rules that the old gray-beard mullahs set for them, so I think if we want to look at the Muslim world you have to look at it in those ways. You have to look at it as a world in conflict."
According to Rushdie, the Western world should actively support the "modernization" of Islam by emphasizing the postive, while exposing adherents of the religion to other cultures and values.
"This involves living in the world as it is. Support that and encourage that, and be extremely critical as we should be, of that other tyrannical, despotic, medievalist Islam, which unfortunately is in power in a lot of places.
"[Really], I often think that the best way to liberate Iran is just to drop Nintendo consoles from the air. And Big Macs," he added.
Watch the video interview here.