Well, here’s a neighborhood that has been doing it for generations. Why haven’t we heard about it before?

At its oldest spot, a small dusty strip of dirt road near a mosque, the neighborhood of Bab al Sheik – a maze of snaking streets too narrow for cars – dates from a time, more than a thousand years ago, when Baghdad ruled the Islamic world.
At that time, orchards and palaces of Abbasid princes unfolded in stately splendor not far away.
Ten centuries later, Bab al Sheik is less grand, but still extraordinary: it has been spared the sectarian killing that has gutted other neighborhoods, and Sunnis, Shiites, Kurds and Christians live together here with unusual ease. It has been battered by bombings around its edges, but the war has been kept from its heart, largely because of its ancient, shared past, bound by trust and generations of intermarriage.
“All of these people grew up here together,” said Monther, a suitcase seller here. “From the time of our grandfathers, same place, same food, same everything.”
Much of today’s Baghdad sprang into existence in the 1970s, when oil nationalization drew Iraqis from all over the country to work. The city’s population more than tripled over the course of 20 years, and new neighborhoods sprawled east and west. The war and civil conflict have seemed to take a heavier toll in those areas than in some of the older neighborhoods.
[…]
Abu Nawal, the father, recounted how a group of men from the office of the Shiite cleric Moktada al-Sadr came to a local cafe, proposing to set up shop in the area. The cafe owner pointed to a sign, which stated in dark script that all discussions of politics and religion were prohibited. The men were then asked to leave.
“The guys in the neighborhood said, ‘If you try to make an office here, we will explode it,'” said Abu Nawal, a shoemaker, whose family has lived in the neighborhood for four generations.
Some time later, Sunni Arab political party members came and were similarly rebuffed.

And this is where you find the moderate Muslims:

He said he despised the poisonous mix of religion and politics that was strangling Iraqi society, and he enjoyed cracking wry jokes at politicians’ expense. Playing off the names for extremist militias, which in Iraq call themselves things like the Islamic Army, he refers to his group of friends as the Arak Army, righteous defenders of an anise-flavored alcoholic drink.
The neighborhood has another rare asset: moderate religious men.
[…]
“I don’t blame those guys who drew the cartoons,” he said, referring to the Danish cartoons depicting the Prophet Muhammad that set off riots and protests across the Islamic world last year.
“Muslims are the ones to be blamed,” he said, sitting in an armchair in his quiet living room. “They have given them this picture.” An ice cream seller walked past his window, hawking in a loud voice.

Wow! Didn’t know there were people like this in the Middle East, did you? Amazing! I guess there’s hope for Iraq after all.