This is a tricky question. For if one replies with the correct answer, which is "Yes!", then the Islamophobe says, "Hey, you see, you guys had nothing genuine to offer, so you used the Sword to get your job done." On the other hand, if one answers the question with the defeatist answer, "No", then the historic military campaigns launched against the enemies of Islam lose their legitimacy and significance. In an attempt to simultaneously protect both the pacifism and the authenticity of his religion, the "progressive, enlightened Muslim" is forced to respond with the latter answer. This is an extremely unfortunate situation, for it strips Islam of its vital military aspect. While on the one hand, this is a reflection on the art of deception of the Islamophobes, on the other hand, it is also a reflection on the spiritual crisis that has pervaded the Ummah. The fact of the matter is that Islam did spread by the Sword. One cannot ignore the fact that the Holy Prophet (peace be upon him) is the most successful army general of all time, having fought several battles and won virtually all of them. Nor can one ignore the fact that the military campaigns carried out by the First Four Caliphs were directly in consonance with the military injunctions of the Qur'an. However, the automatic derivation that once having occupied foreign lands, the conquering Muslims took to a campaign of forceful conversion of the natives to Islam, is a slander borne out of spite and is not supported by historical evidence. In fact, the subjugated populations were allowed religious liberty and basic human rights were not suspended. Conversion to Islam took place only when the conquered populations came into close contact with Islam and Muslims. These were personal decisions that were made for spiritual reasons and not under threat or for worldly reasons.
The lesson to be learnt for all of us is that the rebirth of Islam from the current state of ignominy will necessarily entail some amount of military conflict. Those people who discount the role of the Sword in the name of pacifism do a great disservice to Islam. I would also like to mention as a disclaimer the fact that Islam is the most pacifist religion; the killing of innocent civilians is expressly prohibited in Islam and the present-day acts of terrorism cannot find their motivation from Islam.