"That the problem stems from Islam itself as a religion seems to me extremely unlikely. All of the world's major religious systems are highly complex. Christianity was once (and not that long ago) used to justify slavery and hierarchy; now we see it as supportive of modern democracy. Religious doctrines are subject to political interpretation from one generation to the next. This is no less true of Islam than of Christianity."I would agree with this and add that in addition to complexity and interpretation, the social context in which a religious tradition is mediated is absolutely crucial. Fukuyama appears certain that democracy is essentially secularised Christianity - citing notions of universality and equality as crucial to its development. But I'd argue that one of the reasons for the development of democracy was not necessarily Christianity itself but the post-Reformation conflict between various confessional divisions. This, while highly destructive initially, served as a sort of precursor to the notion of a plural society. Prior to that, Christianity was just as inclined to theocratic forms of government - and by no means free from it after the Reformation - as Islam.
It's important because while religions are rarely internally liberal, the existence of religiosity per se shouldn't be understood as a barrier to democratization. The failure to grasp this can result in a rather Jacobin approach to this whole area: de-coupling religion from the state to some degree is absolutely essential for the development of political democracy but this process does not require, as some have suggested, the elimination of religion itself - still less the elimination of one particular religion. For while Fukuyama may be in no doubt that democracy is essentially a form of secularised Christianity, it is worth recalling that it wasn't so long ago that people used to argue that Roman Catholicism was such a significant 'barrier to democratization'.