Soon after emigrating to Madinah and making sure that the pillars of the new Islamic community were well established on strong bases of administrative, political and ideological unity, the Prophet [pbuh] commenced to establish regular and clearly-defined relations with non-Muslims. All of these efforts were exerted solely to provide peace, security, and prosperity to all mankind at large, and to bring about a spirit of rapport and harmony within his region, in particular.
Geographically, the closest people to Madinah were the Jews. Whilst harbouring evil intentions, and nursing bitter grudge, they showed not the least resistance nor the slightest animosity. The Prophet decided to ratify a treaty with them with clauses that provided full freedom in faith and wealth. He had no intention whatsoever of following severe policies involving banishment, seizure of wealth and land or hostility.
The treaty came within the context of another one of a larger framework relating to inter-Muslim relationships.
The most important provisions of the treaty are the following:
Madinah and its suburbs, after the ratification of this treaty, turned into a coalition state, with Madinah proper as capital and Muhammad [pbuh] as ‘president’; authorities lay mainly in the hand of the Muslims, and consequently it was a real capital of Islam. To expand the zone of peace and security the Prophet [pbuh] started to enter into similar treaties with other tribes living around ‘his state’.