Islam is a religion of mercy to all people, both Muslims and non-Muslims.
When a person analyzes the legislations of Islam with an open mind, the Mercy mentioned in this verse will definitely become apparent. One of the aspects constituting an epitome of this Mercy is the way the legislations of Islam deal with people of other faiths. The tolerant attitude of Islam towards non-Muslims, whether they be those residing in their own countries or within the Muslim lands, can be clearly seen through a study of history. This fact is not only purported by Muslims, but many non-Muslim historians also accept it.
These just relations between Muslims and people of other faiths were not due to mere politics played by Muslim rulers, but rather they were a direct result of the teachings of the religion of Islam, one which preaches that people of other religions be free to practice their own faith, only accepting the guidance offered by Islam by their own choice. God says in the Quran:
“There is no compulsion in religion…” (Quran 2:256)
Not only does Islam demand their freedom to practice religion, but also that they be treated justly as any other fellow human.

The Rights of Non-Muslims in Islam : An Islamic Basis, Non-Muslim Residents, Right to Preservation of Dignity as Human Beings I, Right to Preservation of Dignity as Human Beings II, The Right to Freedom of Belief I, The Right to Freedom of Belief II, The Right to Follow Their Religious Laws, The Right to Justice I, The Right to Justice II, Security of Life, Property, and Honor, Good Treatment, Social Security, Protection from Foreign Aggression
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