Poor Muslim is on diesel — hospital needed (7)
I believe the answer is:
dervish
'poor muslim' is the definition.
'is on diesel hospital needed' is the wordplay.
'on' is a charade indicator (letters next to each other).
'diesel' becomes 'derv' (I've seen this before).
'hospital' becomes 'h'.
'needed' is a charade indicator (letters next to each other).
'is' after 'derv' is 'dervis'.
'dervis'+'h'='DERVISH'
(Other definitions for dervish that I've seen before include "Muslim ascetic (given to whirling movements?)" , "dancer, perhaps" , "Member of Muslim order noted for wild dancing and whirling" , "See 8" , "Muslim noted for frenzied dancing" .)