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Lit., "he did not know [what to make of] them and conceived fear of them". Since they were angels, they did not eat (contrary to the Biblical statement in Genesis xviii, 8); and since, in the Arabian tradition of hospitality, a stranger's refusal to partake of the food offered him is an indication of unfriendly intent, Abraham - who until then had not realized that his guests were angels - became apprehensive of possible hostility on their part.
According to the Biblical account (not contradicted by the Qur'an), Lot, a son of Abraham's brother, lived to the east of the Jordan, in the vicinity of what is today the Dead Sea (called in Arabic Bahr Lut "Lot's Sea"). The "people of Lot" were not actually the latter's community, for he - like Abraham - was a native of Ur in southern Babylonia, and had migrated thence with his uncle: hence, throughout the Qur'an, the expression "Lot's people" designates the inhabitants of the town (or country) of Sodom, among whom he had chosen to live, and with regard to whom he was entrusted with a prophetic mission.
In ancient Middle Eastern culture, if a guest refused to eat the food provided by their host, it was a sign of ill-will.
The people of Lut means the people to whom Lut was sent on his mission of warning, the people of the wicked Cities of the Plain, Sodom and Gomorrah.