Yellow Middle East strip incorporates new fabric (7)
I believe the answer is:
organza
'fabric' is the definition.
(organza is a kind of fabric)
'yellow middle east strip incorporates new' is the wordplay.
'yellow' becomes 'or' (heraldic term).
'middle east strip' becomes 'gaza' (I've seen this in another clue).
'incorporates' indicates putting letters inside.
'new' becomes 'n' (common abbreviation eg NT for New Testament).
'gaza' going around 'n' is 'ganza'.
'or'+'ganza'='ORGANZA'
(Other definitions for organza that I've seen before include "Thin stiff dress fabric" , "Thin stiff natural or synthetic fabric" , "Silky cloth" , "Transparent silky material" , "Silky fabric" .)