This proposal sounds to me a lot like the appeasement of Germany in the 1930s. "Lebensraum," was all they wanted, at first. Later on they decided they would like some additional living space or elbow room or whatever, please. Or if more successful in terms of containment, the proposal smacks somewhat of the reservations that were set up for Native Americans - with the emphasis on letting a group live within their traditional practices. That solution hasn't worked out to the satisfaction of all, to say the least. The other analogy that comes to mind is the formation of Israel out of land owned at that time by others. That solution has endured for over half a century but at significant ongoing costs. ISIS will almost surely want Mecca to be within the caliphate, while other Muslims will want nothing of the sort. Strife will be perpetual, and both sides will blame whoever set up the "unjust" boundary lines.