Lumen Gentium 16 (emphasis added)
But the plan of salvation also includes those who acknowledge the Creator. In the first place amongst these there are the Muslims, who, professing to hold the faith of Abraham, along with us adore the one and merciful God, who on the last day will judge mankind.
This is nothing new in the teachings of the Church. In 1076 St. Gregory VII wrote to the Muslim King Anzir (emphasis added):
We and you must show in a special way to the other nations an example of this charity, for we believe and confess one God, although in different ways, and praise and worship Him daily as the creator of all ages and the ruler of this world. For as the apostle says: “He is our peace who has made us both one.” (Eph. 2.14) Many among the Roman nobility, informed by us of this grace granted to you by God, greatly admire and praise your goodness and virtues… God knows that we love you purely for His honour and that we desire your salvation and glory, both in the present and in the future life. And we pray in our hearts and with our lips that God may lead you to the abode of happiness, to the bosom of the holy patriarch Abraham, after long years of life here on earth.
Two people could describe a person and describe him very differently depending on their angle or how close they are to the person. While the descriptions may differ, they are both attempting to describe the same person. This is what St. Paul had in mind when he wrote to the Greeks about their “unknown god”:
Then Paul stood up at the Areopagus and said: “You Athenians, I see that in every respect you are very religious. For as I walked around looking carefully at your shrines, I even discovered an altar inscribed, ‘To an Unknown God.’ What therefore you unknowingly worship, I proclaim to you."
St. Paul was pointing out that the Athenians were attempting to worship God but they did not know Him nor know how to properly worship Him. St. Paul then proclaimed that he would preach who God is to them.
Muslims worship God as the creator of all, as merciful, and compassionate. While because they do not accept the revelation of the Jewish prophets and their fulfillment in Jesus Christ they do not fully know God, that does not mean they do not know some things about God.
As for the killing of Jews and Christians in the Koran, the verses while troubling are not necessarily absolute. The Koran was written during a time of war, therefore many of its verses may not necessarily be understood as applying outside of that time frame and context. I am not an expert in the Koran but have seen enough debate over those verses to know that they are not universally considered by Muslims to be a living command. Given how often non-Christians take Biblical verses out of context, I’d be loath to assert any true knowledge in how to interpret the Koran.