Who would have thought it? Half of Europe – the half that was so smug about having buried God several generations ago – is waiting in real trepidation for the outcome of a theological argument. When Pope Benedict XVI flies to Turkey tomorrow, he will embody the most potentially incendiary confrontation between Islam and the West since the defeat of the Turks at Vienna in 1683 brought an end to Islamic conquest in Europe.

The Pope will take with him an understanding that at the root of our problems in dealing with the Islamist death cult, there is a fundamental debate to be had about the role of human reason in political affairs.

The remarks he made in a lecture in Regensburg, Germany, which implied that Islam rejected rationality while Christianity saw it as essential to faith were contentious (and almost certainly designed to be so), but they raised a question that almost no Western government has the courage to ask, let alone answer. How is a liberal democracy to deal with an illiberal religious minority in its midst?

To understand the life-or-death significance of what the Pope does and says when he arrives in Istanbul, it is necessary to see this confrontation for what it is. This will involve some traumatic re-adjustment for most of the opinion-forming class in Britain. The first assumption that will have to go is the premise that Islamist terrorism can be understood in pragmatic, politically rational terms: in other words, that it can be addressed with the usual mechanisms of negotiation, concession and amended policy.

The most readily accepted version of this is that a change to our policy in the Middle East will remove the grievances that "fuel" Muslim terrorism. The Cabinet has apparently been advised that all foreign policy decisions over the next decade should have the goal of thwarting terrorism in Britain and that this should involve "a significant reduction in the number and intensity of the regional conflicts that fuel terror activity". So Britain is contemplating constructing a foreign policy, specifically in the Middle East, that is designed to give in to terrorist blackmail.

Never mind that the hereditary grievance of almost all British-born Muslim terrorists is the Kashmir question, to which the almost entirely irrelevant Palestine issue has been tacked on by political manipulators with larger ambitions. (The easiest way to make a connection between the Palestine-Israel conflict and the problem of Kashmir is to construct a global theory of persecution in which British-born Muslims may see themselves as born into a victimhood perpetrated by all non-Muslim nations upon Islam.

That, as it happens, chimes perfectly with the true goal of Islamism, which is global supremacy.) So this ignominious posture – what you might call the "save our own skin; who cares what happens in the rest of the world?" view – is based on a false premise. It is not adjustments to our stance on Israel-Palestine that the international Islamist terror movement wants.

That demand was just a bin Laden afterthought that went down a treat with the old reliable anti-Semitic interest in Europe. What Islamic fundamentalism plans to achieve (and it has made no secret of it) is a righting of the great wrong of 1492, when the Muslims were expelled from Spain: a return of the Caliphate, the destruction of corrupt Western values, and the establishment of Sharia law in all countries where Muslims reside. That is what we are up against.

The Pope characterised it as a battle between reason and unreason. Scholars may debate the theological and historical soundness of his analysis. But what is indisputable is that this is not an argument that is within the bounds of diplomatic give and take, the traditional stuff of international policy argy-bargy. What we could plausibly offer to the enemy, even at our most craven, would never be sufficient.

What is being demanded is the surrender of everything that Western democracy regards as sacred: even, ironically, the freedom to practise one's own religion, which, at the moment, is so useful to Muslim activists. We are forced to accept the Islamist movement's own estimation of the conflict: this is a war to the death, or until Islamism decides to call a halt.

But we do not have to accept all that Islamism claims for itself: most importantly, the idea that it alone embodies the true principles of its faith. The argument that the Islamic religion is inherently violent, which the Pope was thought to have supported in his Regensburg lecture, is academic, in both the literal and metaphorical senses.

What matters for us now is that a great many Muslims – including some enthusiastic converts who cannot even lay claim to a life history of persecution or injustice for their beliefs – are prepared to use their religious affiliation as a justification to commit mass murder. How are we to deal with this? There is only one way: we must, with the co-operation of the Muslim majority, separate the faith from its violent exponents.

Liberal democracy reached an understanding with religion a long time ago: your right, as a citizen, to observe your faith without persecution will be explicitly protected by the state. In return, you will agree to make your peace with the civil law and respect the rights of others to pursue their beliefs. That's the deal. We cannot make exceptions either by removing Muslims who accept their side of the bargain from that protection, or by permitting those who refuse to accept it to flout our law (on, say, sexual equality or the overt slavery of forced marriages).

As Caroline Cox and John Marks argue in their book The West, Islam and Islamism, republished in a new edition by Civitas this week, it is imperative that we distinguish between the Islamic faith and Islamist ideology. If we accept – or even countenance – the view that the two are indistinguishable, we will either be paralysed by our own democratic commitment to religious freedom or forced to engage in all-out religious war.

If a majority of the Muslim community is prepared to separate itself, clearly and explicitly, from the terrorist faction, then we have a chance. If it is not, if it is swept up in the glamour of international victim status and the dark victory of glorious death, then we face generations of bloodshed.

To some extent, this is up to us. Britain must have more to offer than domestic confusion and international cowardice. But it is up to conscientious Muslims as well, of whom much – perhaps more than is fair – must be demanded by way of intercession and courage.