First of all, this ideology is mostly attributed to `Ibn `Arabi and on that note we’d like to clarify that there are two `Ibn `Arabis. Most probably, you mean Muhammad ibn ‘Ali ibn Muhammad al-Taa’i al-Andalusi. He was a prominent Sufi; in fact he was an extreme Sufi. The doctrine of wahdat Al-Wujud was attributed to him.
There is also another Ibn Al-`Arabi who is Qadi Abu Bakr Muhammad ibn ‘Abdullah al-Ishbili, d. 543/1148, the Maliki author of Ahkam al-Qur’an and several other books. He was a Malki scholar and great Imam.
With regard to Islam’s stance on wahdat al-Wujud, we’d like to state that wahdat al-Wujud (unity of existence) or Ittihad is a doctrine whose advocates do not have the idea of a Creator and His creation, instead they say that everything is creation and everything is god.
In fact, this is absolute kufr which is totally not acceptable in Islam and is considered an act of disbelief and heresy.
In this regard, Dr. Abdullah al-Faqih, supervisor of the Fatwa center at the Qatari website Islamweb.net, states: “Ittihad means that the creation is Allah and Allah – Glorified be He – is the creation. Shaykh al-Islam Ibn Taymiyyah referred to this doctrine as general Ittihad. In another place he stated that “this doctrine views the existence as one unity. He also called its advocates as the advocates of wahdat al-wujud (unity of existence). They claim knowledge and authority and view that the existence of the Creator is in itself that of creatures and every trait of the creatures, no matter good or bad, is to be attributed to the Creator who has no separate existence in their view as there is no difference between the Creator and others. They also state that ‘there is nothing but Allah’, and hence the idolaters did not worship other than Him, as they claim that there is nothing but Him. Therefore, every idolater is worshipping Allah (in their view).
Based on this doctrine, they deemed the worshippers of the calf to be correct, regarded Pharaoh as one of the great knowledgeable authorities, and that he was correct in claiming Godhood…It is sufficient for one to be assured of their disbelief and deviance to know that the lightest view they adopt regarding Pharaoh is that he died a believer free of sins…”
This is only a sample of what Imam ibn Taymiyah mentioned about this doctrine and its advocates which clearly indicates that it is mere disbelief and apostasy.