the 1uz has an enormous amount of potential...but the torque curve is it's biggest drawback. when you really get down to it though, the inline6 4.0 is IMHO the best engine for the cherokee's intended application. Stroke it and it's just taht much better!.
A 4.0 1uz engine has enough power to make a vehicle offroadable, but you'll be living in the higher rpms all the time. AND, though you could always make some changes to compression, my engine didn't like running on anything less than premium. Mid-grade was acceptable, just barely, but it idled poorly. Stroking it will make it truly offroadable, and you'll have an xj with a ridiculous top speed, comparatively.
how much are you willing to spend?
the I-6 stroked is the most cost-effective measure and delivers a lot of real-world power, lots of torque starting from the bottom up. Mechanically, it's simple to work on.
Swapping in a 1uz could wind up costing a lot, be very time consuming, and you'll in in virgin territory; that's good and bad. Then if you want it to be offroadable, you should at least stroke it somewhat, which is a lot more coin than the I-6.