Medina/Yathrib, Islam's second holiest city, was originally a Jewish "settlement" for over 2700 years

Medina/Yathrib, Islam's second holiest city, was originally a Jewish
"settlement" 

Although the fact is little publicized, more than one historian has affirmed at the Arab world's second holiest city, Medina, was one of the allegedly "purely Arab" cities that actually was first settled by Jewish tribes.¹
And like the 16th Century English Protestants who financed their endeavors through the plunder of Catholic monasteries in England, the roots of Islamic anti-Semitism might be found in the initial plunder of Jewish settlements, and the imposition of a "poll tax" to fund Arab campaigns.
Bernard Lewis writes:

The city of Medina/Yathrib, some 280 miles north of Mecca, had originally been settled by Jewish tribes from the north, especially the Banu Nadir and Banu Quraiza. The comparative richness of the town attracted an infiltration of pagan Arabs who came at first as clients of the Jews and ultimately succeeded in dominating them. Medina, or, as it was known before Islam, Yathrib, had no form of stable government at all. The town was tom by the feuds of the rival Arab tribes of Aus and Khazraj, with the Jews maintaining an uneasy balance of power. The latter, engaged mainly in agriculture and handicrafts, were economically and culturally superior to the Arabs, and were consequently disliked.... as soon as the Arabs had attained unity through the agency of Muhammad they attacked and ultimately eliminated the Jews.²

In the last half of the fifth century, many Persian Jews fled from persecution to Arabia, swelling the Jewish population there.³ But around  the sixth century, Christian writers reported of the continuing importance of the Jewish community that remained in the Holy Land. For the dispersed Arabian Jewish settlers, Tiberias in Judea was central. In the Kingdom of Himyar on the Red Sea's east coast in Arabia, "conversion to Judaism of influential circles" was popular, and the Kingdom's rule stretched across "considerable portions of South Arabia."
The commoners as well as the royal family adopted Judaism, and one writer ports that "Jewish priests (presumably rabbis) from Tiberias ... formed part the suite of King Du Noas and served as his envoys in negotiations with Christian cities."⁴
According to Guillaume,

At the dawn of Islam the Jews dominated the economic life of the Hijaz [Arabia]. They held all the best land ... ; at Medina they must have formed at least half of the population. There was also a Jewish settlement to the north of the Gulf of Aqaba.... What is important is to note that the Jews of the Hijaz made many proselytes [or converts] among the Arab tribesmen.⁵

The first "Palestinian" or Judean refugees -- the Jews -- had resettled to become prosperous, influential Arabian settlers.

The prosperity of the Jews was due to their superior knowledge of agriculture and irrigation and their energy and industry. Homeless [Jewish] refugees in the course of a few generations became large landowners in the country, [the refugees who had come to the Hijaz when the Romans conquered Palestine] controllers of its finance and trade.... Thus it can readily be seen that Jewish prosperity was a challenge to the Arabs, particularly the Quraysh at Mecca and ... [other Arab tribes] at Medina.

The Prophet Muhammad himself was a member of the Quraysh tribe, which coveted the Jews' bounty, and

when the Muslims took up arms they treated the Jews with much greater severity than the Christians, who, until the end of the purely Arab Caliphate, were not badly treated.⁶

One of the reasons for "this discrimination" against the Jews is what Guillaurne called "the Quran's scornful words" regarding the Jews⁷ The Jews' development of land and culture was a prime source of booty in the Arabian desert peninsula. Beginning at the time of the Prophet Muhammad and Islam⁸from the expulsions, depredations, extortion, forced conversions or murder of Jewish Arabians settled in Medina to the mass slaughter of Jews at Khaibar -- the precedent was established among Arab-Muslims to expropriate that which belonged to the Jews. Relations between the Prophet Muhammad and the Jews were "never ... easy":

They had irritated him by their refusal to recognize him as a prophet, by ridicule and by argument; and of course their economic supremacy ... was a standing irritant.⁹

It appears that the first "instigation" by the Prophet Muhammad himself against the Jews was an incident in which he had "one or two Jews ... murdered and no blood money was paid to their next of kin."

... Their leaders opposed his claim to be an apostle sent by God, and though they doubtless drew some satisfaction from his acceptance of the divine mission of Abraham, Moses, and the prophets, they could hardly be expected to welcome the inclusion of Jesus and Ishmael among his chosen messengers.¹⁰... the existence of pockets of disaffected Jews in and around his base was a cause of uneasiness and they had to be eliminated if he [Muhammad] was to wage war without anxiety.¹¹

Because the Jews preferred to retain their own beliefs,

a tribe of Jews in the neighborhood of Medina, fell under suspicion of treachery and were forced to lay down their arms and evacuate their settlements. Valuable land and much booty fell into the hands of the Muslims. The neighboring tribe of Qurayza, who were soon to suffer annihilation, made no move to help their co-religionists, and their allies, the Aus, were afraid to give them active support. ¹²

The Prophet Muhammad's pronouncement: "Two religions may not dwell together on the Arabian Peninsula."¹³ This edict was carried out by Abu Bakr and Omar 1, the Prophet Muhammad's successors; the entire community of Jewish settlements throughout northern Arabia was systematically slaughtered. According to Bernard Lewis, "the extermination of the Jewish tribe of Quraiza was followed by "an attack on the Jewish oasis of Khaibar."¹⁴
Messengers of Muhammad were sent to the Jews who had escaped to the safety and comfort of Khaibar, "inviting" Usayr, the Jewish "war chief," to visit Medina for mediations.

Usayr set off with thirty companions and a Muslim escort. Suspecting no foul play, the Jews went unarmed. On the way, the Muslims turned upon the defenseless delegation, killing all but one who managed to escape. "War is deception," ¹⁵ according to an oft-quoted saying of the Prophet.¹⁶

The late Israeli historian and former President, Itzhak Ben-Zvi, judged the "inhuman atrocities" of the Arabian communities as unparalleled since then:

... the complete extermination of the two Arabian-Jewish tribes, the Nadhir and Kainuka' by the mass massacre of their men, women and children, was a tragedy for which no parallel can be found in Jewish history until our own day .... ¹⁷

The slaughter of Arabian Jews and the expropriation of their property became Allah's will. According to the Koran,

... some you slew and others you took captive. He (Allah] made you masters of their [the Jews'] land, their houses and their goods, and of yet another land [Khaibar] on which you had never set foot before. Truly, Allah has power over all things.¹⁸

Guillaume reports that the anti-Jewish attack at Khaibar was fiercely fought off, but "though the inhabitants fought more bravely here than elsewhere, outnumbered and caught off their guard, they were defeated."¹⁹ Those who somehow survived constituted the formula for Islam's future successes. Some of the Jews, "non-Muslims" or infidels, "retained their land," at least until Muslims could be recruited in sufficient numbers to replace the Jews. Meanwhile, the Arabian Jews paid a fifty-percent "tribute," or tax, for the "protection" of the new plunderers. As Professor Lewis writes, "The Muslim victory in Khaibar marked the first contact between the Muslim state and a conquered non-Muslim people and formed the basis for later dealings of the same type."²⁰
Thus the Jewish dhimmi evolved [the protected ones] -- the robbery of freedom and political independence compounding the extortion and eventual expropriation of property. "Tolerated" between onslaughts, expulsions, and pillages from the Arab Muslim conquest onward, the non-Muslim dhimmi-predominantly Jewish but Christian too -- provided the important source of religious revenue through the "infidel's" head tax. He became very quickly a convenient political scapegoat and whipping boy as well.

1.Salo W. Baron, A Social and Religious History of the Jews, 3 vols. (New York: Columbia University Press, 1937), 1, pp. 308T
2. Lewis, Arabs in History, p. 40.
3. S. Safrai, "The Lands of the Diaspora," in A History ofthe Jewish People, Ben-Sasson, ed., p. 380.
4. S. Safrai, "From the Abolition of the Patriarchate to the Arab Conquest (425-W)," in History of the Jewish People, Ben-Sasson, ed., pp. 358-359. Of this little-known history Safrai writes: "Twice the Jews of Himyar succeeded in throwing off Ethiopian domination; even in the eyes of Byzantium it was a Jewish kingdom, small but occupying a strategic position. The king of Himyar prevented Byzantine traders from passing through to India on the grounds that Jews were being persecuted in Roman lands. Byzantium was reluctant to risk a war so far away in South Arabia, but was able to persuade Ethiopia to take up its quarrel. The king of Himyar hoped for Persian aid, but there was a lull in the fighting between Rome and Persia at the time, and the Persians did not appreciate the importance of this outlet from the Red Sea being controlled by an ally of Byzantium. Du Noas fell in a battle against an invading Ethiopian army, and the Jewish Kingdom came to an end."
5. Guillaume, Islam, pp. 11-12.
6. Ibid., p. 12.
7. Ibid. See examples in Chapter 4.
8. For details of the Prophet Muhammad-Ab-u al-Qasim Muhammad ibn'Abd  Alla ibn 'Abd al-Muttal-ib ibn Hashim-see Guillaume, Islam, pp. 20-54; the "tradi-
tional" biography of Muhammad (Arabic) is Ibn Hisham's recension of Ibn Ishaq's
al-Sira al-Nabawiyya, 2 vols. (Cairo, 1955); The Life of Muhammad, abridged
English trans. by A. Guillaume (Karachi, 1955). Cited by Norman A. Stillman, Jews of Arab Lands, A History and Source Book (Philadelphia, 1979), p. 6, n. 9. See also Lewis, Arabs in History.
9. Guillaume, Islam, p. 43.
10. Ibid., pp. 43-44.
11. Ibid., p. 44.
12. The Nadir tribe. Ibid., p. 46. Also see Stillman, Jews of Arab Lands, pp. 8-10, for a study of "exclusively Muslim" sources, tracing Muhammad's "face-to-face contact with a large, organized Jewish Community," an "encounter" that "did not prove to be an auspicious one." The Nadir tribe in Medina went to Khaibar in "exile," Stillman, Jews~ p. 14.
13. Salo W. Baron, Social and Religious History, Vol. 1, p. 311. He cites Muwatta, in Al-Zurkani's commentary IV, p. 71.
14. Lewis, The Arabs in History, p. 45.
15. Al-Bukhari, al-Jami al-Sahih, bk. 56 (Kitab al-Jihad, Bab 157), ed. M. Ludolf Krehl (Leiden, 1864), Vol. 2, p. 254, cited by Stillman, Jews, p. 17. According to Stillman, "This hadith appears in several other canonical collections."
16. Stillman, Jews~ p. 17, citing Ibd Sa'd, Kitab al-Tabaqat al-Kabir, ed. by Edvard Sachau et al. (Leiden, 1909), Vol. 2, pt. 1, pp. 66-67; al-Waqidi, Kitab al-MaghaZ4 Vol. 2, pp. 566-68; Ibn Hisham, al-Sira al-Nabawiyya, Vol. 2, pp. 618-619.
17. Itzhak Ben-Zvi, The Exiled and the Redeemed (Philadelphia, 1961), p. 144. Also see Stillman, Jews, p. 14ff.
18. The Koran, Surah 33, v. 26-32, Dawood translation.
19. Guillaume, Islam, p. 49.
20. Lewis, Arabs, p. 45.