I've hear that the Soviet Union went to great lengths to divide territory along cultural lines, and failed. Point is, it doesn't matter what identity you have, it matters whether you identify with it. There's a stage in psychological development that's authoritarian, and then after that... a loong time after that, comes the individual, with individual rights and freedoms.
Jesus, oddly, managed to implant the seed of that into the authoritarian systems of his time, which took a thousand years or more to develop. Or maybe it was the Greeks.
Anyway, point is, things like the French Revolution, Western democracy, the individual who can think for him or herself, and is given rights, all born equal, is a massive cultural change, and without it, elections don't really work. Tribes will vote for their authoritarian leaders and so on, religion remains a control freak which keeps grabbing more and more power, and individual freedom of expression is crushed, along with original thinking and invention.
So if you are X and identify as X and are part of group X and are under the control of X's authoritarian power, well you're not modern. It makes no difference whether next door there's another group that's Y and slightly different yet also authoritarian. You're all as "bad" as each other (from a modern viewpoint).
The fact that the two groups are not having their own lands strictly in an, you know, segregated way, is besides the point really. Lots of segregated authoritarian groups living next to each other, trying not to step on each others' toes, can only last so long. Arguably that's what happened to Lebanon.
What makes a person modern is that they can think for themselves outside of their group, and know why individual rights matter. Which is a whole different thing to the Life of Bryan and the famous scene where the crowd blindly repeat everything the Messiah says.
So point is, dividing up territory is meaningless if the people themselves don't identify with their group and are blindly moved by that group. A modern nation contains many many groups, yet they don't fragment along sectarian lines at the first bit of friction, because they are not "white" or "black" or "muslim" or "christian" or "buddhist" or "atheist"... they are citizens first, and the other stuff is secondary.
Until the culture of the middle east moves to modern values and modern minds, they can't be citizens and their lands can't be modern nations in a democratic way.
Thing is, that's true for everyone and it is a historical accident that modernity appeared in some parts of the world first. And the authoritarian way worked ok more or less for thousands of years, so it isn't bad as such. Just, modernity makes certain things possible. But people have to grow to get there.
And the EU telling people to be democratic is, well, just doesn't realise what a huge change that is. If you take the Magna Carta, that started a gradual change over 800 years ago. How many countries today call themselves democratic when they obviously have fairly fascistic dictators? (Not counting the USA :-P )