Unbiased people who study Islamic history and the Muslims’ relationship with the Jews and Christians living under Islamic rule will come across the following fact: The People of the Book have always lived in peace and tranquility under Islamic rule.
God reveals that those Christians and Jews who believe in Him and the Day of Judgment and do good deeds will receive the fairest rewards for their virtue:
Those who believe, those who are Jews, Christians, and Sabaeans, all who believe in God and the Last Day and act rightly will have their reward with their Lord. They will feel no fear and will know no sorrow. (Qur’an, 2:62)
Prophet Mohammed’s (may God bless him and grant him peace) Exemplary Attitude
Prophet Mohammed (saas), the best role model for Muslims who deal with the People of the Book, was always just and compassionate toward Jews and Christians and tried to create an atmosphere based on reconciliation and love among these three religious communities. Various agreements and guarantees allowed Christians and Jews to live as autonomous religious communities.
Prophet Mohammed (saas) allowed the Jews to become a party to the Constitution of Madinah signed with the Aws and Khazraj clans, which permitted them to continue living as a separate religious community. The basis for this acceptance of the Jews’ faith and traditions was laid down in the following article: "The Jews of Banu Awf [non-Muslim minorities] are a community along with the believers. To the Jews their religion, and to the Muslim their religion." 
Freedom of Belief and Worship
Beginning at the time of Prophet Mohammed (saas), there has always been freedom of religion in Muslim-ruled lands. Articles guaranteeing the protection of monasteries and churches have been important parts of all agreements signed between Muslims and the People of the Book. Historical documents reveal that many Muslims visited monasteries to rest for the night, to enjoy a meal, or even to have a civilized conversation during their travels or campaigns.
The People of the Book often responded warmly toward Muslims. The following expressions were recorded in an agreement signed by Caliph Umar, which was presented to Abu Ubayda by the Syrian Christians:
[We imposed these terms on ourselves:]… not to withhold our churches from Muslims stopping there by night or day; to open their doors to the traveller and wayfarer; …to entertain every Muslim traveller in our customary style and feed him… We will not abuse a Muslim, and he who strikes a Muslim has forfeited his rights. 
Under Islamic rule, the People of the Book have always celebrated their religious festivities as they pleased. From time to time, the Muslim leadership even attended them. A letter by the Nestorian Patriarch Isho’yab III (650-60) reveals the Muslim leaders’ compassion and acceptance toward the People of the Book:
They [Abbasids] have not attacked the Christian religion, but rather they have commended our faith, honored our priests… and conferred benefits on churches and monasteries. 
These historical facts reveal that, contrary to much of what we read today, Islam is a religion of peace and acceptance. Christians and Jews lived freely under Muslim rule and enjoyed the freedoms of religious belief and thought.
Tranquility under Muslim Rule
During the first few centuries of the Christian era, Jews oppressed Christians; as the latter became more powerful, they began to oppress Jews and even fellow Christians belonging to other sects. The Middle Ages were dominated by the Catholic church’s oppression of all Jews and Christians who did not agree with its teachings. Some non-Catholics sought refuge with the Muslims. The oppression and violence directed by Byzantium against the Egyptian Monophysite and the Jacobean Christians, the horrors endured by those Jews and Orthodox Christians who found themselves in the path of the Catholic Crusaders, and the persecution endured by the Jews of Europe, as well as by the Muslims and Jews in Spain after the reconquista, have never occurred on Muslim soil.
Jews escaping Spanish tyranny found the peace and security they sought on Ottoman soil. Driven out of Spain and faced with more hardship in other countries where they sought refuge, many died of hunger and thirst at the gates of towns and cities they were not permitted to enter. Jews who boarded Genoese ships were either exploited or sold to pirates. Sultan Bayazid welcomed the Jews into his empire and demanded that the people show them the respect and acceptance to which they were entitled.
The order proclaimed not to refuse the Jews entry or cause them difficulties, but to receive them cordially. Sultan Bayazid is known to history as a religious man, and his hospitality and acceptance were based on the Qur’an’s morality.
Living under the Islamic rule, the People of the Book took part in the bustling cultural life. Muslim leaders extended their cultural patronage to the lands they conquered and imported them to Baghdad, capital of the empire, where they would be studied by Muslim, Christian, and Jewish scientists. Each of them in turn, could teach their works based on these studies alongside their own religious beliefs. At a time when Muslims supported science and freedom of thought, Europe, the center of Christianity, had Inquisition courts that burned people at the stake for their heretical, meaning non-Catholic, thoughts or religious beliefs.
The Muslim leaders’ sense of justice led many Christians and Jews to bring their cases to Islamic courts, even though they had their own courts with their own laws. At one time, the Nestorian patriarch Mar Timothee I (780-825) even circulated a decree to counteract the ever-increasing number of Christians taking their cases to Islamic courts. 
The Non-Muslims’ Legal Status
The People of the Book living within the Muslim realm were considered dhimmis, rather than prisoners of war, and therefore were guaranteed certain legal rights. For example, in exchange for paying the jizya tax, their lives and property were guaranteed, and they enjoyed freedom of religious belief and thought, were exempted from military service, and had the right to their own law courts to resolve their disputes. On some occasions, their taxes were refunded.
Our Prophet (saas) said: "I am the adversary of those who wrong the dhimmis or burden them with a load they cannot carry." According to this principle, Muslims considered it their duty to protect those non-Muslims living under their rule. The Muslims’ sense of justice dictates that dhimmis come under the state’s protection.
The amicable history between Muslims and Jews and Christians is an example for the present. The Islamic code of ethics requires that non-Muslims be accepted, that their values and beliefs be respected, and that an environment in which peaceful coexistence is possible be created. Therefore, the spread of this code, as well as efforts to correct some misguided practices claiming to be Islamic, will play an important role.
. “Islam and anti-Semitism,” 31 January 2004; www.worldhistory.com/wiki/I/Islam-and-anti-Semitism.htm
. (Majid Khadduri, War and Peace in the Law of Islam (Baltimore: The Johns Hopkins Press, 1955), 193-94.)
. Fred Aprim, “The A to Z of the ancient Chaldeans and their relation to modern Chaldeans;” www.atour.com/education/20001021a.html
. Abraham Danon, in the Review Yossef Daath, no. 4.
. Levent Ozturk, Asr-i Saadetten (Christians in Islamic Society from the Blessed Period of the Prophet to the Crusades), 188.