Does the Quran teach violence against non-Muslims?

Probably the most repeated claim made by anti-Quran polemicists is that it teaches violence against non-Muslims, especially Jews and Christians. This claim in its most sinister manifestation asserts that Muslims in their alleged deep hatred for Jews and Christians are called to kill Jews and Christians anywhere they find them. Promoters of this lie cannot produce a single quranic passage, even if taken out of context, to support it; rather the deceptive, unethical support they produce is totally based on false assumptions, such the following:

Quran enjoins killing all pagans
Quran views Jews and Christians as pagans

Then, the Quran enjoins the killing of Christian and Jews 

To draw such a horrific false conclusion, anti-Quran polemicists have to dream up two grossly false assumptions. It is a gross false assumption that the Quran mandates wholesale killing of pagans or any religious group or race. Furthermore, the Quran does not view Jews and Christians as pagans. Since the Quran allows Muslims to eat animals slaughtered by Jews or Christians but not by pagans; and allows a Muslim man to marry a Jewish or a Christian woman, but not a pagan woman, it is clear that the word pagan in the quranic language does not refer to Jews or Christians. Jews and Christians, whether they form nations or communities living within a larger Islamic community, are given the honoring title People of the Book. Thus it is obvious that the quranic verse that says “Kill them wherever you find them” (Quran 2:191) does not refer to the People of the Book. Pagans are human beings too. Thus, Islamic tradition has always understood this verse as referring only to a situation in which the early Muslim community was at war with certain pagan tribes that would raid the Muslim community and then take refuge in the sanctuary of Mecca’s grand mosque, where fighting is not allowed. So this and similar verses must be understood in historic context and in light of other verses. There are many Quranic verses, which anti-Muslims agitators conveniently ignore, that explicitly restrict fighting to be in self defense: “Fight for the sake of God those who fight you” (Quran 2:190) and “if they lean toward peace, then lean toward peace” (Quran 8:61) These two verses along with the cardinal truth that “Allah does not forbid you respecting those who have not made war against you on account of your religion, and have not driven you out of your homes, that you show them kindness and bring them justice; surely Allah loves the doers of justice” (Quran 60:7) prove that anti-Muslims agitators are utterly ignorant or purposefully, for theological and political reasons, misrepresent the message of the Quran. Far from being bent on killing non-Muslims, the Quran does call on its believers “to show them kindness and bring them justice.” Historically, Jewish and Christian communities thrived under Islamic rule. How could that happen if the Quran calls for killing Jews and Christians? Agitators who do not know history or purposefully ignore it or focus on exceptional incidents make up stories about Islam. But history tells the truth about Islam. So let history be our guide. A historian asked the following rhetorical question, and gave us an honest answer:

In what other culture has a tiny village like this [ referring to Malula, a Christian village in Syria] survived intact, keeping to its own ways, entirely surrounded by a rival religion for some 1,200 years? It was the Koran which made it possible, specifying that the people of the book—Christians and Jews—must be allowed to worship God in their own manner. This Koran-based tolerance has been the norm in terms of Muslim attitudes to the two closely-related religions. It is a modern aberration that the lethal mixture of politics, fundamentalism and terrorism—associated in particular with Al-Qaida and Osama bin Laden—is at present distorting the image of Islam. When the crusaders reached Syria, they were horrified to find Christians living peacefully under the Muslims. By that time, four centuries after the beginning of Islam, the Muslims had long been more civilized than any western Christian.^[i]

Yes indeed, the Quran made it possible. There are many eastern Christian sects, none of them would have had the freedom to practice their religion under Rome, but were allowed to practice under Islam. To claim that Islam calls for the persecution of Jews and Christians is a farfetched lie that contradicts history.
The Quran is clear in its instruction to treat the People of the Book in the nicest possible manner “Do not argue with the People of the Book except in the nicest possible manner, except those of them who are oppressive, and say: We believe in that which has been revealed to us and revealed to you, and our God and your God is one, and we submit to Him” (Quran 29:46). If the act of arguing must be carried out in the nicest possible manner, would then the Quran mandate fighting or killing the People of the Book, whether they form nations, communities or individuals, on grounds that they are People of the Book? The answer is obvious to anyone who has common sense. As to “those of them who are oppressive” the Quran provides two solutions: If they are oppressive by verbal (or written) assault and false accusations, then in addition to verbal (or written) refutations the following verse comes into application. “Come let us call our sons and your sons and our women and your women and our near people and your near people, then let us be earnest in prayer, and pray for the curse of Allah on the liars” (Quran 3:61). And if they are oppressive through military aggression, then and only then “Fight against those who do not believe in God, nor in the Last Day, nor do they prohibit what God and His messenger have prohibited, nor do they abide by the religion from among the People of the Book until they pay the due tax, willingly or unwillingly” (Quran 9:29).
The adjectives mentioned in the verse leave no room to assume that just, pious and peaceful People of the Book are intended. Thus this mandate is understood to apply to those of them who commit military aggression. Also, this mandate in addition to being a circumstantial not universal one is the responsibility of government not renegade individuals or militia groups.  
It must be mentioned that biblical verses that sanction violence and call for war far exceed any violence mentioned in the Quran. While biblical scholars emphasize that these violent biblical verses must be read in context applying proper methods of exegesis, some of these scholars became totally unprincipled when it comes to reading the Quran. Rather than viewing quranic passages through the opaque lens of islamophopia, honesty demands of critics to recognize that passages must be interpreted in light of other passages according to sound exegetical principles. Assuming that those critics are free from malice intentions and ulterior motives, had they applied proper principles of interpretations they would not be so quick to launch their faulty accusations.
Quranic verses that enjoin tolerance, cooperation and peaceful coexistence are still in effect and have not been abrogated as claimed by some ill-minded extremists and anti-Muslims polemicists. Some claim that the tolerance taught and enjoined in the Quran has been later cancelled through the alleged ‘verse of the sword.’ The falsity of such a notion is obvious by the absence of the word sword from the Quran. The theme of tolerance, forgiveness and mercy that characterized the early revelation is an overarching principle, not a tactic only to be replaced with another theme of war and violence. The following verse which was revealed among the latest revelation in the Medina period not only disproves the abrogation claim but also gives us the timeless framework for cooperation.“We designated for each a law and a way, had Allah willed He would have made you [all] one religious group, but He did not that He might try you in what He gave you, therefore via with one another in doing good deeds” (Quran 5:48).