قَاتِلُوا الَّذِينَ لَا يُؤْمِنُونَ بِاللَّـهِ وَلَا بِالْيَوْمِ الْآخِرِ وَلَا يُحَرِّمُونَ مَا حَرَّمَ اللَّـهُ وَرَسُولُهُ وَلَا يَدِينُونَ دِينَ الْحَقِّ مِنَ الَّذِينَ أُوتُوا الْكِتَابَ حَتَّىٰ يُعْطُوا الْجِزْيَةَ عَن يَدٍ وَهُمْ صَاغِرُونَ ﴿٢٩﴾9:29 Fight those who believe not in God nor the Last Day, nor hold that forbidden which has been forbidden by God and His Apostle, nor acknowledge the religion of truth, [even if they are] of the People of the Book, until they pay the Jizyah with willing submission, and feel themselves subdued.
Some people have falsely concluded from verse 9:29, that Muslims are commanded to attack all non-Muslims until they pay money. In fact, such an interpretation is completely false and contradicts authentic Islamic teachings. Commenting on this verse, Shaykh Jalal Abualrub writes:
These Ayat (Quranic verses) stress the necessity of fighting against the People of the Scripture, but under what conditions? We previously established the fact that the Islamic State is not permitted to attack non-Muslims who are not hostile to Islam, who do not oppress Muslims, or try to convert Muslims by force from their religion, or expel them from their lands, or wage war against them, or prepare for attacks against them. If any of these offenses occurs, however, Muslims are permitted to defend themselves and protect their religion. Muslims are not permitted to attack non-Muslims who signed peace pacts with them, or non-Muslims who live under the protection of the Islamic State. (Abualrub, Holy Wars, Crusades, Jihad)
Likewise, the following fatwa points out that Muslims cannot attack a peaceful non-Muslim country:
Question: Is it an obligation of an Islamic state to attack the neighboring non-Muslim states and collect ‘jizya’ from them? Do we see this in the example of the rightly guided Caliphs who fought against the Roman and Persian Empires without any aggression initiating from them?
Answered by Sheikh Hânî al-Jubayr, judge at the Jeddah Supreme Court
If the non-Muslim country did not attack the Muslim one nor mobilize itself to prevent the practice and spread of Islam, nor transgress against mosques, nor work to oppress the Muslim people in their right to profess their faith and decry unbelief, then it is not for the Muslim country to attack that country. Jihâd of a military nature was only permitted to help Muslims defend their religion and remove oppression from the people.
The Persians and Romans did in fact aggress against Islam and attack the Muslims first.
The Chosroe of Persia had gone so far as to order his commander in Yemen specifically to kill the Prophet (peace be upon him). The Romans mobilized their forces to fight the Prophet (peace be upon him), and the Muslims confronted them in the Battles of Mu’tah and Tabûk during the Prophet's lifetime.
May Allah guide us all. And May peace and blessing be upon our Prophet Muhammad. (SOURCE, emphasis added)
The above fatwa refers to the historical context in which the Prophet Muhammad (peace be upon him) fought against other nations. The Prophet Muhammad did not initiate agression against anyone, rather he and his followers were under attack from all who sought to crush the new Islamic state. The first hostilities between the Muslims and the Roman empire began when the Prophet Muhammad's messenger to the Ghassan tribe (a governate of the Roman empire), Al-Harith bin Umayr Al-Azdi, was tied up and beheaded (Al-Mubarakpuri, Ar-Raheeq Al-Makhtum, p. 383). The killing of a diplomat was an open act of war, and the Prophet Muhammad sent an armed force to confront the tribe, but the Roman empire brought in reinforcements and the resulting conflict, known as the Battle of Mut'ah, was a defeat for the Muslims. Only after this did subsequent battles between the Muslims and the Roman Empire occur, and the Muslims emerged victorious. Likewise, as mentioned in the above fatwa, hostiltiies between the Muslims and the Persians only began after the Persian emperor Chosroe ordered his governor in Yemen Badham, to kill the Prophet Muhammad pbuh, although his efforts were thwarted when the latter accepted Islam. Other non-muslim groups, such as those in Madinah, also initiated hostilities against the Muslims despite peace treaties as Shaykh Sayyid Sabiq writes:
As for fighting the Jews (People of the Scripture), they had conducted a peace pact with the Messenger after he migrated to Madinah. Soon afterwards, they betrayed the peace pact and joined forces with the pagans and the hypocrites against Muslims. They also fought against Muslims during the Battle of A`hzab , then Allah revealed…[and he cites verse 9:29] (Sayyid Sabiq, Fiqhu as-Sunnah, Vol. 3, p. 80)
In light of the historical context of this verse, it becomes very clear that the verse was revealed in connection with agression initiated against Muslims. As Dr. Jamal Badawi very accurately concludes with regard to verse 9:29 and similar verses:
All of these verses, without exception, if studied carefully, address aggression and oppression committed against Muslims at the time of the Prophet (peace and blessings be upon him), whether by idolatrous Arabs, some of the Jewish tribes in Madinah, or by some Christians. (SOURCE)
Therefore, the command to fight in verse 9:29 relates to those non-muslims who commit agression and not those who are committed to live in peace. The verse is subject to certain conditions that were apparent when it was implemented in the time of the Prophet Muhammad pbuh, as Shaykh Sayyid Sabiq writes:
What we have stated makes it clear that Islam did not allow the initiating of hostilities, except to: 1. repel aggression; 2. protect Islamic propagation; 3. deter Fitnah and oppression and ensure freedom of religion. In such cases, fighting becomes a necessity of the religion and one of its sacred ordainments. It is then called, ‘Jihad’. (Sayyid Sabiq, Fiqhu as-Sunnah, Vol. 3, p. 81)
The verse then proceeds to mention some issues relating to the Islamic state, and governing non-muslim citizens of the Islamic state. Dr. Maher Hathout comments on the regulations in verse 9:29:
Freedom of religion is an essential aspect in an Islamic state. One of the five pillars of Islam is zakat (almsgiving). The People of the Book (Christians and Jews) are not obliged to pay the Islamic zakat that is spent by the state for social necessities and state affairs as defined in the Quran (see 9:60). But they must pay other taxes to share in the state budget. If they refuse to pay this tax to the state and rebel against the state, then it is the obligation of the state to confront them until they pay it. This is what Caliph Abu Bakr did after the death of the Prophet, when some people refused to pay zakat. (Hathout, Jihad vs. Terrorism; US Multimedia Vera International, 2002, p.53)
The verse mentions Jizya, which is unfortunately misunderstood by some people. Like any nation, the Islamic government requires its citizens to pay taxes in return for its services. Since Muslims pay the Zakat, the non-muslim citizens are required to pay Jizya (for more information on Jizya, please refer to Jizya in Islam and Jizyah and non-muslim minorities). Dr. Monqiz As-Saqqar writes concerning the Jizya tax:
The sum of jizya was never large to the extent that the men were unable to pay. Rather, it was always available and reasonable. During the reign of the Prophet, peace and blessings be upon him, jizya never exceeded one dinar annually and it never exceeded four dinars under the Umayyad rule. (SOURCE)
Shaykh Abu'l-Hasan Al-Mawardi (d. 1058CE) explicitly points out that the Jizya should be exacted in accordance with the means of the people, and the Imam should judge the conclude the amount to the satisfaction of the leaders of those being taxed:
The fuqaha (Jurists) differ as to the amount of the Jizya. Abu Hanifa considers that those subject to this tax are of three kinds: the rich from whom forty-eight dirhams are taken; those of average means from whom twenty four are taken, and the poor from whom twelve dirhams are taken: he thus stipulated the minimum and maximum amounts and prohibits any further judgement on behalf of those responsible for its collection. Malik, however, does not fix its minimum and maximum amount and considers that those responsible should make their own judgement as to the minimum and maximum. Ash-Shafi'i considers that the minimum is a dinar, and that it is not permitted to go below this while he does not stipulate the maximum, the latter being dependant on the ijtihad (judgement) of those responsible: the Imam, however, should try to harmonise between the different amounts, or to exact an amount in accordance with people's means. If he has used his judgement to conclude the contract od jizyah to the satisfaction of the leaders of the people being taxed, then it becomes binding on all of them and their descendants, generation after generation, and a leader may not afterwards change this amunt, be it to decrease it or increase it. (Al-Mawardi, al-Ahkam as-Sultaniyyah, Ta-Ha Publishers Ltd. 1996, pp. 209-210)
Hence, the laws of Islam forbid Muslims from opressing non-muslims and command them to treat others with justice and compassion. In fact, the Prophet Muhammad pbuh himself forbade Muslims from harming non-muslim citizens of an islamic state or any non-muslim with whom there was an agreement of peace, as he said,
"The one who wrongs a covenanter or impairs his right or overworks him or forcibly takes something from him, I will be his prosecutor on the Day of Judgment. (Sunan Abi Dawud 170/3 no. 3052, Sunan an-Nasa'i 25/8 no. 2749, and verified by Al-Albani no. 2626).
In conclusion, verse 9:29 commands Muslims to fight against only those who initiate agression as illustated by its historical context. Muslims may only fight under strict conditions, and are commanded to live peacefully with peaceful non-muslim neighbors.