The modern concept of Middle Eastern dance owes both its fame and infamy to the advent of tourism to Egypt in the 1920's. During this time, as an effect of European colonialism and historical events like the discovery of King Tutankhamun's tomb, the Mid-East opened its borders to tourism from the U.S. and Europe. In this climate, cities like Cairo and Casablanca become very sophisticated modern tourist centers. It was then that what we now as "Bellydance" became a stage-oriented form of dance.
The performance style of Middle Eastern dance and its accompanying music developed in this time. Before then, dancing for performance was relegated to private solo and group (mostly family groups) performances in homes of the wealthy, or at weddings and celebrations in tents or outdoors at some Moulids (celebration of the Saints).
Performing at a public "show" venue and dancing outside the home or communal environment was and largely still is a culturally strange concept, especially when it pertains to women. Women usually danced in their homes and around family, for themselves or at celebrations. Men were also adept at dance and there are various masculine forms of Middle Eastern dance.
The stage version first developed in cosmopolitan clubs and restaurants where dancing became associated with chic nightlife. Gradually a complex style of staged dance came about, developed over the years through tradition and innovation, by many talented dancers who were trained and hired to perform. For the first time the sole female performer was highlighted, and many Egyptian dance stars came out of this era. Choreography was designed to cover a stage space and the music became increasingly elaborate, mixing Mid-eastern and orchestral instruments. The costume became less traditional and more elaborate for stage, and borrowing from the American bra-style top, the recognizable sequined and beaded two-piece bra-and-skirt style costume was born.
Other events further served to Westernize the concept of Middle Eastern dance. Hollywood movies exploited the concept and many American and European films from the 1930's and beyond perpetuated the concept of "Orientalism", a fantasy notion of an exotic, over-sexualized Middle East coined by European explorers/colonists to these countries. The image of the exotic dancer seducing men or temple Odalisques languishing in harems is a Hollywood concept borne out of Westernized notions, condescension, and fantasy.
Note: Hollywood movies and other myths are also responsible for perpetuating the idea that there were sexily dressed "Bellydancers" in Biblical times, and there were women that danced seductively in ancient temple rituals, etc. The costumes that we know of now were only invented in the last 70 years and were part of stage and screen productions.
Any type of dance in Biblical times was probably more folkloric or related to Hebraic customs, and obviously there were no modern costumes 2,000 years ago.
There is also no historic truth in the "Dance of Salome/Dance of the Seven Veils". This myth is based on a play written by Oscar Wilde in 1891. The harem is a real historic phenomenon. But contrary to European stories, the harem (which means forbidden by law in Arabic) was a place where women family members lived in inter-generational groups separate from men, and into which only men of that family could enter.)
A sideshow promoter named Sol Bloom was said to have popularized the term "Belly" when in the 1893 Chicago World's Fair he harked the traditionally-dressed dancers brought to the venue as girls who danced undulating their bellies. In the Victorian period, this was quite scandalous. Anything exotic or Eastern was surely misunderstood.
The modern idea of Middle Eastern dance is more accurately described when associated with the evolution of village and urban folk dance into stage and theater. The term "Bellydance" is actually not indigenous to its homelands. In the Arab world it is known as "Raqs Sharki", "Raqs" simply meaning "Dance" and "sharki" meaning "East". Performed in its original and respected contexts, it is a national treasure in its countries of origin.
Tahia excelled at a Brazilian dance (made famous by Carmen Miranda, Fred Astaire and Ginger Rogers) called the “karioka” and was renamed: Tahia Carioca. She incorporated the latin footwork and beats into her performances. She then moved onto to star in many films during the “Golden Age” of Egypt. Tahia not only had the great talent of dancing, but could act and sing as well. The first film in which she starred as an actress was opposite El-Rihani in Li’bet Al-Set (Woman’s Play) done in 1946. Her most famous film is Shabab Imra’a (A Woman’s Youth) in which she played an older woman who seduced a college student. She went on to star in over 200 films, theater plays and soap operas.