That's exactly right. They divide the world into two Houses --
The House of War is where someone, somewhere has refused to submit to Allah. The Muslims wage Jihad there and will do whatever it takes to destroy other faiths and force Islam on everyone.
The House of Peace -- Peace/Submission/Islam is all the same word. If everyone is a good Muslim, then there is peace. That is their goal. They know it's a bloody road to get there. But they are willing to chop as many heads as it takes.
Hah! As if ...
It's not enough for everyone to be a good mohammedan. They also have to be the right kind of mohammedan. When they're not killing Jews, Christians, and pagans, they're killing each other.