Before elaborating on the Quranic approach towards the People of the Book, we must clarify a few points:
1. There is no doubt that Islam abrogated all the religions before it. The issue of abrogation is one of Muslims' main beliefs as evidenced and substantiated by explicit proofs. And if there are some verses lauding and praising the People of the Book and treating them with grace, it is not in any way a sign of the superiority or merit of their religion over Islam. The graceful words of the Quran are for some reasons which are in no way dichotomous with the fact that the religion of Islam is true and that it has abrogated the religions before it.
2. Islam's opinion about the people of the Book is very different from its view regarding the pagans and polytheists. Each one is addressed with a particular literature. Never have all the People of the Book been looked at as similar to pagans and polytheists. In fact, only some of the People of the Book have been considered as equal to polytheists because of their anomalous conducts and beliefs. We shall mention some examples from the Quran in the following paragraphs.
3. Most of the verses of the Quran concerning Jews, Christians and Sabians refer to those who lived in the time of the Holy Prophet (S). That is why, those rules do not apply to all the People of the Book at all time; rather the arguments and reasons presented in those verses should be considered carefully. Hence, based on our conclusion from those verses, we should judge whether or not the People of the Book who are living in our time are entirely disbelievers and that how we should treat them according to the Quran.  It should therefore be noted that it cannot be deciphered from the verse in question that most of the People of the Book including those in our time are transgressors or evil-livers. In fact, it can be inferred that most of the People of the Book  who lived in the time of the Holy Prophet (S) and confronted him were as such.  Now, in order for us to draw out Quran's general attitude towards the People of the Book, we must look at all the Quranic arguments and reasons and pass our judgment based on them.
4. In most cases, the Quran has drawn attention to things common between Muslims and the People of the Book[1] commanding them to take notice of the commonalities.  These beliefs on the part of the People of the Book will constitute one of the most important factors that helps maintain proper and solid relationship between Muslims and the People of the Book.  It will spread a kind of convergence and coherence between Muslims and non-Muslims.  Having said that, now we shall see what the Quran says about the People of the Book. The Quran's perspective can be studied within two approaches:
Negative Approach to the People of the Book
The Quran uses different literatures in relation to the People of the Book keeping in view the requirements of the time and space. It condemns and reproaches some of the People of the Book owing, largely, to their conducts and behaviors like their stubbornness and enmity towards the Prophet of Allah,[2] opposition and enmity to Islam after knowing it,[3] alteration of the heavenly Book[4] etc. As well, most of them have been reproached due to their beliefs such as associating humans with the One God (monotheism) [5]and so forth.
More importantly, there are verses in the Quran which reproach those who oppose the truth and turn hostile to it after it has been revealed to them. The People of the Book are particularly addressed by these verses because they were the ones who, after the truth was unveiled to them, started to oppose and stand up against it. The Quran strongly condemns these people in many verses:
"Surely those who disbelieve and turn away from Allah's way and oppose the Messenger after that guidance has become clear to them cannot harm Allah in any way, and He will make null their deeds."[6]
There are many such verses in the Quran which we do not mention them because they refer to the same point i.e. their enmity to Islam and to the truth after it has been revealed to them.
The Holy Quran's Positive Approach to the People of the Book
Unlike Torah, the Holy Quran maintains a positive perspective towards the opponents. It does not condemn them simply because they are not Muslims. Of course, there are certain conditions in this approach which we shall mention as under:
The verses which look at the People of the Book positively can be elaborated under four sections:
1. The Holy Quran has made much effort to spread humane morals and attitude among human beings. That is why there are many a number of verses in the Quran relating to moral issues. Hence, the Quran praises most of the people who are adherent to humane morals. The People of the Book are not an exception. In those cases where they act morally, they are praised and encouraged. Of course, there is an exception to this and that is when a person commits mean actions which wipe out the effects of his good actions, in that case he is no longer worthy of praise.
2. Although the Quran considers Islam as a religion that abrogated the religions before it, it gives an opportunity to the People of the Book talking to them with a reconciliatory and compromising tone allowing them to pay jizya[7], live freely and stay on their religion in the territory of Islam.[8] This is a positive approach on the part of the Quran to the People of the Book.
3. The Quran, sometimes, praises and commends the People of the Book due to their proper actions, monotheistic behaviors and acts of worship. It says:
"Not all of them are alike: Of the People of the Book are a portion that stand (For the right): They rehearse the Signs of Allah all night long, and they prostrate themselves in adoration. * They believe in Allah and the Last Day; they enjoin what is right, and forbid what is wrong; and they hasten (in emulation) in (all) good works: They are in the ranks of the righteous. * Of the good that they do, nothing will be rejected of them; for Allah knoweth well those that do right."[9]
This verse clearly praises some of the People of the Book due to their good and proper conducts. In addition to it, in many other verses, the Quran praises a number of the People of the Book because of their being moderate. "There is a party of them keeping to the moderate course". [10]
As well, in some verses, disbelief (kufr) has been ascribed to some of the People of the Book and it can be deduced from these verses that some others are not disbelievers: "Surely those who disbelieve from among the followers of the Book and the polytheists shall be in the fire of hell, abiding therein; they are the worst of men."[11]
4. There are also other verses which have praised and lauded the People of the Book in such a way that it sounds as if some of them will attain salvation. For instance, the Quran says:
"Those who believe (in the Qur'an), and those who follow the Jewish (scriptures), and the Christians and the Sabians,- any who believe in Allah and the Last Day, and work righteousness, shall have their reward with their Lord; on them shall be no fear, nor shall they grieve."[12]
"And most surely of the followers of the Book there are those who believe in Allah and (in) that which has been revealed to you and (in) that which has been revealed to them, being lowly before Allah; they do not take a small price for the communications of Allah; these it is that have their reward with their Lord; surely Allah is quick in reckoning."[13]
Conclusion and Reconciliation among the Verses
If we look carefully into the foregoing verses, it will become clear that the Quran's perspective towards the People of the Book is varied:
Those who became acquainted with the reality of Islam and refrained from embracing it are amongst those who are definitely reproached by the Quran. As to the reason of rejection, it can be their carnal desires, power mongering, wealth or something else. They are reproached irrespective of whether they adhered to human values or did not.  Then there are the People of the Book who have understood the reality of Islam but they have behaved in such a way that they have trampled human morals tarnishing tawhid (belief in One God) consciously and dealing with Islam with enmity, hurting the Prophet and believers and so forth. Even those who lived before the advent of Islam and did not act properly have been reprimanded and condemned because they were the ones who tampered with the Holy Scripture, killed prophets and so on. They are also treated in the same way.
But those who did not misbehave are looked at with respect. The truth is that the Quran seeks to get others also acquainted with Islam and to help them embrace Islam since it is in their best interest.[14] However, insofar as they do not show enmity to Islam, they are respected and the Quran praises them. Among them are good people with good moral characteristics, even though they are not acquainted with Islam but Islam still looks at them with respect. They adhere to human rules throughout their lives, they believe in God and their lives are characterized by godly manners. They are the ones who believe in the Day of Judgment and resurrection. Now with this criterion obtained from the Quran, we can also judge about the People of the Book in the present time as well and can say which ones are worthy of respect and which ones are worthy of condemnation and reproach.

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