This may sound crazy (it's really not) but is there a country big enough to import & house them all, so the rest of the world can police them better/easier??
Not "Crazy" at all. There are actually a great number of Muslims who want as much if not more than anyone to see a more Moderate Form of Islam offered, who reject the primitive crap about the Religion, desire a Positive Interaction with humanity regardless of religious faith.
Key to any Evolution is Saudi Arabia. They could begin a process that would bring fully 70% all of Muslim Warfare to a halt if they desired.
Thats where the Religion started. The Main Tribes would have to be separated once and for all, have their own Homelands. By no means would it be an easy process but their entire religious faith's existence and their own existence (or at least that of their families that are here after them) depend upon this because civilized humanity has stopped (serious) Muslim Advancement like we are seeing today on two occasions before and had they had, at that time, the weaponry we have now they would have wiped all Muslims from the Earth at either of those times.
They were not capable of doing that though.
Maybe not within whats left of our own Lifetime but people are going to get tired of this shit. Religion is Malware to the Brain, Faith is Fine but Dark Age belief systems, and the millions of zombies who practice these will eventually get on Humanity's Last Nerve.
Islam can agree to what you suggest, a relocation of it's followers who are committed to those Dark Aged beliefs out of Western Countries and agree to not harm those Muslims who want to embrace a Moderate form of the Religion and thus elect to remain behind in Western Lands or it can (and will) experience what it did on those previous two occasions, when Muslim Advancement & Attack of foreign lands was turned back.
Only this time the fight won't be with swords and stones.
tl:dr is yes, The Middle East has plenty enough room to house the percentage of Muslims committed to Islam to a degree that acceptance of a Moderate Form of that is not a thing they will, under any circumstances do. Separation of The Tribes would be a thing that World needed to take upon themselves. That necessary for their own Peace. That would be, or should be, a thing the outside world doesn't get involved in.
Israel....the location of that and certain Holy Sites within that....would present some "challenges".....to put that real mildly.
Solution (or not) to this is, to a great degree, up to The Saudis.
Saudis unwilling to Evolve towards and play a large role in a solution, war is almost certainly unavoidable, with those committed to the faith of Islam. It simply does not mix with other Faiths (By Order of The Prophet).
Not unlike the situation here with a large % of our Black Population at Present.....Saudi Arabia is (
almost certainly) not going to be willing or intelligent enough to do whats needed to avoid bloodshed.
