Beginning of translated IslamOnline fatwa
Question: What is the opinion of our religion on the fact of certain countries celebrating holidays such as Victory Day, Workers' Day or New Year's Day and others?
Answer: In the second part of a long study in the book Bayān li-l-Nās min al-Azhar al-Sharīf [A Proclamation to the People from the Noble al-Azhar] it is mentioned that the word ʿīd [Eid or festive holiday] is used to refer to that which repeats annually and is communal, whether at the level of families, villages or regions.
To celebrate these festive holidays means to give them attention. Such holidays can either be entirely worldly or may be religious or contain religious elements. Islam does not forbid celebrating worldly holidays as long as their purpose is a good and the celebration does not contain elements that Islam disapproves of.
As for religious holidays, they may be mentioned in Islamic law, as in ʿĪd al-Fiṭr and ʿĪd al-Aḍḥā, or they may not be mentioned in Islamic law, such as the Prophet’s Night Journey and his birthday. Whatever is mentioned in Islamic law should be celebrated according to the law and should not be done otherwise. As for what is not mentioned in the law, people have two opinions on them. Some prohibit them because they consider them bidʿa [false innovation], while others permit them due to the lack of scriptural evidence prohibiting them.
Those who prohibit them use the hadith mentioned in al-Nasāʾī and Ibn Ḥibbān with authentic chains of transmitters from Anas , who said the Prophet came to Medina, whose people had two days in which they played/celebrated. He [the Prophet] said:
You had two days when you would play, but Allah (SWT) has given Muslims something instead that is better than them: the day of Fiṭr and the day of Aḍḥā.
According to them everything other than these two days is a false innovation.
The reply to them is that the hadith did not restrict the holidays but merely mentioned the superiority of the Islamic holidays over the holidays of the people of Medina that they had acquired from the Persians, such as the Eid of Nowruz at the beginning of the new year in spring, and the Eid of Mihrajan in the autumn, as mentioned by al-Nuwayrī in his Nihāyat al-Arab. A piece of evidence is that he [the Prophet] refers to the day of Friday as an Eid [meaning that the hadith above does not restrict the meaning of “Eid” to those two days alone].
There is no text that prohibits joy and celebration on days other than those two. The Quran records the celebration of the Muslims at the victory of the Byzantines over the Persians at the beginning of Surat al-Rūm.
Another reply to them is that not every innovation is blameworthy. ʿUmar said regarding making the tarāwīḥ prayer communal: “What a great innovation this is!”
In summary, there is no issue with celebrating any wholesome occasion if its intention is legal and its manner is within the bounds of the faith. There also no issue with calling such days “Eids” [as Arabs do] since the matter has to do with the named objects rather than the names themselves.
End of translated fatwa
Source: Arabic PDF (archived from IslamOnline)