A dispute over regulations for non-Muslim places of worship in Selangor, Malaysia, has become a political challenge for Prime Minister Anwar Ibrahim's coalition. Critics argue the new guidelines could restrict religious activities in commercial areas.

A dispute over where churches and temples can operate in Malaysia’s richest state has become an awkward political test for Prime Minister Anwar Ibrahim’s ruling coalition, which came to power promising to protect the country’s multiracial and multi-faith society. The row centres on planning guidelines in Selangor, a wealthy and densely populated state surrounding Kuala Lumpur, that critics say could restrict non-Islamic places of worship in commercial areas, where many religious groups have long...