Actually, I think just giving them jobs would be enough. I don't mean a jobs welfare or anything, but free countries generally do now war with each other.
Radical ideology seems to suit those that are resentful and jobless. What is it about idle hands being the devil's playthings? Jeremiah Wright is doing the same thing in this country: preaching Marxism in the guise of Christianity.
I haven't read the Koran, but I've got to believe that not all Muslims want to kill us. My wife was stationed over the Middle East (Bahrain), and most people she met were very nice to her. That said, if 23% of European Muslims sympathize with the 9/11 terrorists, that's saying that those are a minority, but certainly not a fringe group.
I believe that the long term strategy has to freedom. The only other alternative is creating a glass parking lot, something nobody wants. Like Christianity, I think the way the religion is practiced will adapt to the conditions on the ground. The way that Christianity has been practiced has changed throughout the centuries, and even now, Christianity is practiced differently depending on the locality. Of course, the good news is that most of our "radical" Christians are dead now. They've been dead for centuries. The bad news is that radical Muslims are heads of state.