The event of Mubahala and the refutation of heretics.
The background of these verses is that the Holy Prophet ﷺ ultimatum to the Christians of Najran which included three options in the order given below:
1. Accept Islam, or
2. Pay jizya جزیہ (a levy on free non-Muslims under Muslim rule), or
3. Get ready for a war.
After mutual consultation, the Christians sent a delegation to the Holy Prophet ﷺ consisting of Shurahbil ` Abdullah b. Shurahbil and Jabbar ibn Fayd to the Holy Prophet ﷺ ۔ They came and began their talks on religious issues. When they, in their effort to prove the godhood of Jesus (علیہ السلام) ، took their debate to the extremes of dispute, that was the moment this verse of Mubahala was revealed. Thereupon, the Holy Prophet ﷺ invited the Christians to join in the Mubahala confrontation (a form of resolving disputes by praying to Allah, the details of which shall shortly be discussed) and quite readily, he himself came out with Sayyidah Fatimah ؓ Sayyidna Ali ؓ and their sons, Hasan and Husain ؓ along with him all set for the مُباھلہ Mubahalah. Looking at this, Shurahbil said to his two comrades: 'Look, you already know that he is a prophet of Allah and getting into a Mubahalah confrontation with a prophet means certain death and destruction for us. So find out some other way to get out of this fix.' His comrades asked him as to what he thought it could be. Shurahbil said: 'I think the best solution is to opt for a truce as advised by the prophet'. So, on this everybody agreed. As a result, the Holy Prophet ﷺ made peace by fixing a levy on them which was accepted by them as well. (Tafsir ibn Kathir).