According to the most authoritative traditions of Islam, Muhammad understood terror to be one of God's distinctives favors upon him, making him superior to other prophets.
Narrated Abu Huraira:
Allah's Apostle said, "I have been sent with the shortest expressions bearing the widest meanings, and I have been made victorious with terror, and while I was sleeping, the keys of the treasures of the world were brought to me and put in my hand." Abu Huraira added: Allah's Apostle has left the world and now you, people, are bringing out those treasures. (Sahih Al-Bukhari, Volume 4, Book 52, Number 220)
Abu Huraira reported that the Messenger of Allah (may peace be upon him) said: I have been given superiority over the other prophets in six respects: I have been given words which are concise but comprehensive in meaning; I have been helped by terror (in the hearts of enemies): spoils have been made lawful to me: the earth has been made for me clean and a place of worship; I have been sent to all mankind and the line of prophets is closed with me. (Sahih Muslim, Book 004, Number 1062, 1063, 1066, 1067)
The Qur'an declares:
Soon shall We cast terror into the hearts of the Unbelievers, for that they joined companions with Allah, for which He had sent no authority: their abode will be the Fire: And evil is the home of the wrong-doers! (3:151)
Remember thy Lord inspired the angels (with the message): "I am with you: give firmness to the Believers: I will instil terror into the hearts of the Unbelievers: smite ye above their necks and smite all their finger-tips off them." This because they contended against Allah and His Messenger: If any contend against Allah and His Messenger, Allah is strict in punishment. (8:12-13)
Let not the unbelievers think that they can get the better (of the godly): they will never frustrate (them). Against them make ready your strength to the utmost of your power, including steeds of war, to strike terror into (the hearts of) the enemies, of Allah and your enemies, and others besides, whom ye may not know, but whom Allah doth know. Whatever ye shall spend in the cause of Allah, shall be repaid unto you, and ye shall not be treated unjustly. (8:59-60)
And Allah turned back the Unbelievers for (all) their fury: no advantage did they gain; and enough is Allah for the believers in their fight. And Allah is full of Strength, able to enforce His Will. And those of the People of the Book who aided them - Allah did take them down from their strongholds and cast terror into their hearts. (So that) some ye slew, and some ye made prisoners. And He made you heirs of their lands, their houses, and their goods, and of a land which ye had not frequented (before). And Allah has power over all things. (33:25-27)
It is He Who got out the Unbelievers among the People of the Book from their homes at the first gathering (of the forces). Little did ye think that they would get out: And they thought that their fortresses would defend them from Allah! But the (Wrath of) Allah came to them from quarters from which they little expected (it), and cast terror into their hearts, so that they destroyed their dwellings by their own hands and the hands of the Believers, take warning, then, O ye with eyes (to see)! (59:2)
That is because they resisted Allah and His Messenger: And if any one resists Allah, verily, Allah is severe in punishment. (59:4)
Of a truth ye are stronger (than they) because of the terror in their hearts, (sent) by Allah. This is because they are men devoid of understanding. (59:13)
Reading those verses it becomes clear that even though it is Allah who casts the terror into the hearts of the unbelievers, he does so by the action of the Muslims: ... smite ye above their necks and smite all their finger-tips off them ... Against them make ready your strength to the utmost of your power, including steeds of war, to strike terror into (the hearts of) the enemies ... some ye slew, and some ye made prisoners ... destroyed their dwellings by the hands of the Believers.
Allah commands deeds of terror by the believers against the unbelievers as the means of creating the emotion of terror in their hearts. The only reason needed for action is that "they resisted Allah and His Messenger".
Such an approach to "conflict management" is nothing to be ashamed about according to Islamic understanding, but it is a basis for pride. It is one reason for the superiority of Muhammad over all other prophets.
See the section Islam & Terrorism for detailed discussions on various aspects of this issue.
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