http://www.catholic.com/thisrock/2002/0207bt.asp has some wisdom on this front:
In the wake of 9/11 it has become more important than ever that Catholics have an accurate view of Islam. A starting point, though not the ending point, is reading what the Catechism of the Catholic Church has to say. It states, "The plan of salvation also includes those who acknowledge the Creator, in the first place amongst whom are the Muslims; these profess to hold the faith of Abraham, and together with us they adore the one, merciful God, mankind’s judge on the last day" (CCC 841).
To understand this, one both has to look at the original context of the quote. The Catechism is not a freshly drafted document. It is in large measure a synthesis of other documents, and one has to look up quotations in the original sources to understand them fully. This is the case for the Catechism’s statement about Muslims, which is taken wholly from Vatican II.
Many find the first part of the quote perplexing: "The plan of salvation also includes those who acknowledge the Creator, in the first place amongst whom are the Muslims." To many this sounds like Muslims can be saved by adhering to Islam. That isn’t what it means, as shown by the original context.
If you look at Lumen Gentium (LG), the Vatican II document from which the quote is drawn, it becomes clear that the phrase is not meant to say that Islam is a method of salvation parallel to Christianity. The quote comes from LG 16, but it is part of a larger context in the document. To appreciate how it fits into the picture, one needs to go back at least as far as LG 13, which starts by proclaiming, "All men are called to belong to the new people of God"—i.e., to the Church. Section 13 concludes by stating, "All men are called to be part of this catholic unity of the people of God. . . . And in different ways to it belong, or are related: the Catholic faithful, others who believe in Christ, and finally all mankind, for all men are called by the grace of God to salvation."
All mankind is called to the "Catholic unity of the people of God"—in other words, to become Catholics. Some have done so, and so LG states that some "belong to" the Catholic Church while others are related to it "in different ways." Those who belong to it are "the Catholic faithful," while those who are related in various ways include "others who believe in Christ" (who are related to the Church in one way) and "all mankind" (who are related to the Church in a different way).
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It means that God desires their salvation and has made plans for their salvation—plans that include giving them graces that lead in the direction of salvation and the Church. But that doesn’t mean that they can be saved by being nothing more than non-Jewish theists.
Within the category of non-Jewish theists, Muslims today hold the first place in that they are the largest such group and have a number of commonalities with Judaism and Christianity, several of which the council goes on to note:
(1) They "profess to hold the faith of Abraham." The operative word here is "profess"—they claim to hold the faith of Abraham. In reality, their faith is an imperfect version of the faith that comes from Abraham, but they are trying to follow in the footsteps of Abraham, and the Council gives them credit for that.
(2) "Together with us they adore the one, merciful God." For many, this statement is perplexing. However, as we saw in last issue’s "Brass Tacks" column, God is aware of and acknowledges all that is good and true in the worship offered to him, however imperfect an understanding of him a worshiper may have. While Muslims, like Jews, do not accept the Trinity, they do acknowledge that God is the only true God and that he is merciful. This means that they honor things that are true about God but have a limited understanding of him.
Christians have a fuller understanding of God because he has revealed more to us about himself: specifically, that he is a Trinity. This doctrine cannot be deduced by human reason; it can only be known by revelation.
Failure to accept this revelation of the Christian age does not stop Muslims from worshiping God any more than it stops Jews. It means only that they know less about God and that they have erroneous corollary ideas (for instance, that Jesus is not the Son of God).
To make clear how this works, allow me to take an example from pop culture: Suppose that you and I both knew millionaire Bruce Wayne. I might know, because he revealed it to me, that he is also Batman. You may hear this claim and reject it, in which case you adopt the false corollary belief "Batman is not Bruce Wayne." That does not mean that you don’t know and relate to either Bruce or Batman, it means only that you misunderstand the relationship between them.
In the same way, one may worship God and honor Jesus as a prophet (which he was) without understanding that Jesus is God. Indeed, many people in his own day did that: They knew the historical Jesus but had a false understanding of his identity.
(3) Muslims recognize that God is "mankind’s judge on the last day." This is another link they have to biblical faith. Muslims may have erroneous ideas about some of the things that will occur before, after, or around this event, but that much they have right.
Additional elements of truth that Muslims have are listed in another conciliar document (Nostra Aetate 3), but in no place does the Council indicate that Islam—or Judaism or any non-Christian religion—is a path of salvation. There may be elements of truth in these religions, and God may give his grace to whomever he wants, non-Christian religions aren’t vehicles of salvation.
And the same thing goes for religions which profess to be Christian, but aren't - they may use the same words, but do not mean them to be the same as Christianity.
profess to hold the faith of Abraham
And many Catholics are masters at manipulating definitions. That's how the RCC fakes people out.