David Cameron has said there are grounds for "cautious optimism" that uprisings across the Middle East will not usher in extremism.
The Prime Minister has taken business leaders to the Middle East
In a speech, the Prime Minister told the Kuwaiti parliament: "History is sweeping through your neighbourhood."
The region is at the "epicentre of momentous change" and the outcome was of vital importance to the UK's trade and security interests, he said.
"It is too early to say how things will turn out. Too often, in the past, there has been disappointment. But there are some grounds for cautious optimism," he added.
Mr Cameron went to Kuwait after visiting Egypt, where protests led to the end of Hosni Mubarak's 30-year regime.
He strongly criticised the "appalling violence" suffered by demonstrators in Libya and praised their courage in asserting their right to protest against leader Colonel Muammar Gaddafi.
The Prime Minister said he rejected the argument that Arab or Muslim countries "can't do democracy".
"For me, that's a prejudice that borders on racism."
Accompanied on the trip by 36 business leaders, he said it was in Britain's interests to see greater emphasis on human rights in the Middle East.
"For decades, some have argued that stability required highly controlling regimes, and that reform and openness would put that stability at risk," he said.
"So, the argument went, countries like Britain faced a choice between our interests and our values. And to be honest, we should acknowledge that sometimes we have made such calculations in the past.
"But I say that is a false choice. As recent events have confirmed, denying people their basic rights does not preserve stability, rather the reverse.
"Our interests lie in upholding our values - in insisting on the right to peaceful protest, in freedom of speech and the internet, in freedom of assembly and the rule of law," he added.