Over the last few years, tensions have arisen over the cultural, religious, and physical “space” of Islam in Europe. This article explores how governments deal with such debates by examining the “Face of Mohammed” cartoon crisis in Denmark, the “Fitna” film in Holland, and the ban on minaret construction in Switzerland. The analysis shows how the tensions tend to decrease when governments create opportunities for actors to discuss their fears, hopes, and values. In contrast, tensions tend to escalate if governments are closely associated with the parties who are politicizing Islam, if basic values are invoked, and if only legal means are used to deal with differences. The cultural diversity of Europe is likely to persist, if not increase. Therefore, greater efforts are needed to find ways of dealing with differences in a constructive manner. Mediative approaches can help to deescalate tensions while respecting the core values and identities of the involved actors.