Seems you are taking the same course as I am perhaps, as this sentence has blown a few fuses in my brain. I agree that the entire that-clause is a direct object. I do not see it as a nominal relative clause though because it starts with 'THAT'.
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AnonymousGood point, and I am not sure if the confronting in fact is a part of the object, but what else can it be?"confronting Islamic extremism" is a noun phrase.