The majority of both Sunni and Shi'a Muslim jurists consider dogs to be, like women, ritually unclean, though jurists from the Sunni Maliki school disagree. However, outside their ritual uncleanness, Islamic fatāwā, or rulings, enjoin that dogs be treated kindly or else be freed.
Muslims generally cast dogs in a negative light because of their ritual impurity. The story of the Seven Sleepers of Ephesus in the Qur'an (and also role of the dog in early Christianity) is one of the striking exceptions. Muhammad didn't like dogs according to Sunni tradition, and most practicing Muslims do not have dogs as pets. It is said that angels do not enter a house which contains a dog. Though dogs are not allowed for pets, they are allowed to be kept if used for work, such as guarding your house or farm, or when used for hunting purposes.
According to a generally unaccepted Sunni tradition attributed to Muhammad, black dogs are evil, or even devils, in animal form. This report reflects the pre-Islamic Arab mythology and the vast majority of Ulema (Muslim jurists) viewed it to be falsely attributed to Muhammad.
Another Sunni tradition attributed to Muhammad commands Muslims not trade or deal in dogs. According to El Fadl, this shows the cultural biases against dogs as a source of moral danger. However, the Hanafi scholars, the largest school of ritual law in Sunni Islam, allow all trading in dogs.
According to one story, Muhammad is said to have informed a prostitute who had seen a thirsty dog hanging about a well and given it water to drink. Allah forgave her because of that good deed.
In a tradition found in the Sunni hadith book, al-Muwatta, Muhammad states that the company of dogs voids a portion of a Muslims good deeds.
Book of Daniel is a lot older than Islam, or Christianity, etc.
Another story has Buddha carrying around his pet dog. The Chinese managed to turn that story into the more modern Fu Dog ~ the lionlike spiritual dog frequently portrayed in stone or bronze at the front of a Buddhist temple or prayer room.
Different things for different people at different times.
Afghan Hounds are popular among the wealthy all over the world.
It's the desert Arabs (those called by anthropologists and historians "the True Arabs") who have all these things against dogs and pigs.
I was discussing the movie the "The Hurt Locker" (an excellent movie if you haven't seen it) with a co-worker recently and made the statement "For anyone that thinks we can westernize the Islam culture, they should see that movie".
He ROARED with laughter in agreement.
But then it's really not about westernizing that culture; anyone knows that our presence in the Middle East is really about the big "I".