In SpaceClaim, use a plane through the diameter. Use Split Body to create two bodies. Use the Share button on the Workbench tab to create Shared Topology. Now the hole is made up of two rectangular faces. Apply a Face Meshing control on those two faces to force rectangular elements on those faces. Apply Edge Sizing to the 2 edges along the Z axis with one value of element size. Apply another Edge Sizing to the 4 semi-circular edges with another value of element size.