Allah censures the Jews and Christians for their dispute with Muslims over Ibrahim Al-Khalil and the claim each group made that he was one of them. Muhammad bin Ishaq bin Yasar reported that Ibn `Abbas said, "The Christians of Najran and Jewish rabbis gathered before the Messenger of Allah ﷺ and disputed in front of him. The rabbis said, `Ibrahim was certainly Jewish.' The Christians said, `Certainly, Ibrahim was Christian.' So Allah sent down,
يأَهْلَ الْكِتَـبِ لِمَ تُحَآجُّونَ فِى إِبْرَهِيمَ
(O people of the Scripture (Jews and Christians)! Why do you dispute about Ibrahim,) meaning, `How is it that you, Jews, claim that Ibrahim was Jew, although he lived before Allah sent down the Tawrah to Musa How is it that you, Christians, claim that Ibrahim was Christian, although Christianity came after his time" This is why Allah said,
أَفَلاَ تَعْقِلُونَ
(Have you then no sense)
Allah then said,
هأَنتُمْ هَـؤُلاءِ حَـجَجْتُمْ فِيمَا لَكُم بِهِ عِلمٌ فَلِمَ تُحَآجُّونَ فِيمَا لَيْسَ لَكُمْ بِهِ عِلْمٌ
(Verily, you are those who have disputed about that of which you have knowledge. Why do you then dispute concerning that of which you have no knowledge)
This Ayah criticizes those who argue and dispute without knowledge, just as the Jews and Christians did concerning Ibrahim. Had they disputed about their religions, which they had knowledge of, and about the Law that was legislated for them until Muhammad ﷺ was sent, it would have been better for them. Rather, they disputed about what they had no knowledge of, so Allah criticized them for this behavior. Allah commanded them to refer what they have no knowledge of to He Who knows the seen and unseen matters and Who knows the true reality of all things. This is why Allah said,
وَاللَّهُ يَعْلَمُ وَأَنتُمْ لاَ تَعْلَمُونَ
(It is Allah Who knows, and you know not.)
Allah said,
مَا كَانَ إِبْرَهِيمُ يَهُودِيًّا وَلاَ نَصْرَانِيًّا وَلَكِن كَانَ حَنِيفًا مُّسْلِمًا
(Ibrahim was neither a Jew nor a Christian, but he was a true Muslim Hanifa), shunning Shirk and living in Iman,
وَمَا كَانَ مِنَ الْمُشْرِكِينَ
(and he was not of the Mushrikin.)
This Ayah is similar to the Ayah in Surat Al-Baqarah,
وَقَالُواْ كُونُواْ هُودًا أَوْ نَصَـرَى تَهْتَدُواْ
(And they say, "Be Jews or Christians, then you will be guided...") 2:135.
Allah said next,
إِنَّ أَوْلَى النَّاسِ بِإِبْرَهِيمَ لَلَّذِينَ اتَّبَعُوهُ وَهَـذَا النَّبِىُّ وَالَّذِينَ ءَامَنُواْ وَاللَّهُ وَلِىُّ الْمُؤْمِنِينَ
(Verily, among mankind who have the best claim to Ibrahim are those who followed him, and this Prophet and those who have believed. And Allah is the Wali (Protector and Helper) of the believers.)
This Ayah means, "The people who have the most right to be followers of Ibrahim are those who followed his religion and this Prophet, Muhammad ﷺ , and his Companions from the Muhajirin, Ansar and those who followed their lead." Sa`id bin Mansur recorded that Ibn Mas`ud said that the Messenger of Allah ﷺ said,
«إِنَّ لِكُلِّ نَبِيَ وُلَاةً مِنَ النَّبِيِّينَ، وَإِنَّ وَلِيِّي مِنْهُمْ أَبِي وَخَلِيلُ رَبِّي عَزَّ وَجَل»
(Every Prophet had a Wali (supporter, best friend) from among the Prophets. My Wali among them is my father Ibrahim, the Khalil (intimate friend) of my Lord, the Exalted and Most Honored)
The Prophet then recited,
إِنَّ أَوْلَى النَّاسِ بِإِبْرَهِيمَ لَلَّذِينَ اتَّبَعُوهُ
(Verily, among mankind who have the best claim to Ibrahim are those who followed him...)
Allah's statement,
وَاللَّهُ وَلِىُّ الْمُؤْمِنِينَ
(And Allah is the Wali (Protector and Helper) of the believers.) means, Allah is the Protector of all those who believe in His Messengers.