The tradition which is presented to prove that Muhammad(sa) ordered Muslims to kill Jews concerns a future situation of conflict between Muslims and Jews and has nothing to do with day-to-day Muslim-to-Jew relations.
Abu Huraira reported that Prophet Muhammad(sa) said:
The last hour would not come unless the Muslims will fight against the Jews and the Muslims would kill them until the Jews would hide themselves behind a stone or a tree and the stone or the tree would say: ‘O Muslim, O servant of Allah, there is a Jew behind me; come and kill him; except for the tree Gharqad, for it is the tree of the Jews.’
This tradition mentions an incident to take place in the future related to a conflict between Muslims and Jews. It does not apply to all Jews at all times. Its contents reflect a situation of conflict. Prophet Muhammad’s statement regarding the Jews addresses those Jews deserving of censure at that certain time. It does not mean that he is censuring Jews simply because they are Jews.
In the allegedly anti-Semitic tradition in question, both Islam and Prophet Muhammad(sa) have consistently spoken up for justice, while condemning injustice—regardless of the person or people committing the act. As the Qur’an clarifies, “O ye who believe! Be strict in observing justice, and be witnesses for Allah, even though it be against yourselves or against parents and kindred. Whether he be rich or poor, Allah is more regardful of them both than you are.” The Jews that Prophet Muhammad(sa) critiques in this tradition receive censure because they are worthy of censure, not because they are Jews.
[1] Muslim, Book on Fitan (Trials), Chapter: The last hour will not set in until a person…
[2] Al-Baihaqi as quoted in Mishkat Kitab al-Ilm, Chap. 3; Kanz al-‘Ummal, Chap. 6.
[3] Qur’an 4:136.