There was a period in history when muslim and Jewish relations was not so bad. But the Jews had to live as Dhimmis {second class citizens} to the muslims. In many parts of the world this was preferable to being burned at the stake in Europe.
how bad was "dhimmitude?"
Well, lets see what wiki says:
http://en.wikipedia.org/wiki/Dhimmi"
A dhimmi ([ˈðɪmːiː]; Arabic: ذمي, collectively أهل الذمة ahl al-dhimmah, "the people of the dhimma or pact of protection"; Ottoman Turkish & Urdu zimmi, "one whose zimma [responsibility of protection] has been taken") is a non-Muslim subject of a state governed in accordance with sharia law. The term connotes an obligation of the state to protect the individual, including the individual's life, property, and freedom of religion and worship, and required loyalty to the empire,[1] and a poll tax known as the jizya.
This status was originally only made available to non-Muslims who were People of the Book (i.e. Jews and Christians), but was later extended to include Sikhs[citation needed], Zoroastrians, Mandeans, and, in some areas, Hindus[2] and Buddhists.[3][4] Dhimmi had fewer legal and social rights than Muslims, but more rights than other non-Muslim religious subjects.[5] This status applied to millions of people living from the Atlantic Ocean to India from the 7th century until modern times.[6][7][8] Conversion by a dhimmi to Islam was generally easy, and almost without exception emancipated the new convert from all legal impairments of his previous dhimmi status. Violently forced conversion was rare or unknown in early Islamic history, but increased in frequency in later centuries, such as in the Almohad dynasty of North Africa and al-Andalus.[7][8]
"
"
Treatment of DhimmisDhimmis were allowed to "practice their religion, subject to certain conditions, and to enjoy a measure of communal autonomy" and guaranteed their personal safety and security of property, in return for paying tribute and acknowledging Muslim supremacy.[10] Taxation from the perspective of dhimmis who came under the Muslim rule, was "a concrete continuation of the taxes paid to earlier regimes"[11] (but now lower under the Muslim rule[12][13][14]) and from the point of view of the Muslim conqueror was a material proof of the dhimmi's subjection.[11] Various restrictions and legal disabilities were placed on Dhimmis, such as prohibitions against bearing arms or giving testimony in courts in cases involving Muslims.[15] Most of these disabilities had a social and symbolic rather than a tangible and practical character.[16] All of them, however, were designed to eliminate other religions in a deliberate, long-term process. Although persecution in the form of violent and active repression was rare and atypical.[17], the limitations on the rights of dhimmis made them vulnerable to the whims of rulers and the violence of mobs[18]
While recognizing the inferior status of dhimmis under Islamic rule, Bernard Lewis states that in most respects their position "was very much easier than that of non-Christians or even of heretical Christians in medieval Europe."[19] For example, dhimmis rarely faced martyrdom or exile, or forced compulsion to change their religion, and with certain exceptions they were free in their choice of residence and profession.[20] Yet there were constraints; the Muslims reserved the right to control the military and agriculture, leaving trade and business to the dhimmis.[21]
In general, the Muslim attitude toward dhimmis was one of contempt instead of hate, fear, or envy, and was rarely expressed in ethnic or racial terms.[22]
"