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Lit., "our hearts are repositories [of knowledge]" - an allusion to the boast of the Jews that in view of the religious knowledge which they already possess, they are in no need of any further preaching (Ibn Kathir, on the authority of Ibn 'Abbas; identical explanations are mentioned by Tabari and Zamakhshari).
I.e., all their beliefs are centred on themselves and their alleged "exceptional" status in the sight of God.
Their hearts are unreceptive because they claim they have enough knowledge already.
The Jews in their arrogance claimed that all wisdom and all knowledge of God were enclosed in their hearts. But there were more things in heaven and earth than were dreamt of in their philosophy. Their claim was not only arrogance but blasphemy. In reality they were men without Faith. (I take Gulfan here to be the plural of Gilafun the wrapping or cover of a book, in which the book is preserved.) As usual, there is a much wider meaning. How many people at all times and among all nations close their hearts to any extension of knowlege or spiritual influence because of some little fragment which they have got and which they think is the whole of Allah's Truth? Such an attitude shows really want of faith and is a blasphemous limitation of Allah's unlimited spiritual gifts to His creatures. [According to another view, the verse refers to the Jewish claim that a covering had been placed over their hearts which prevented them from grasping the message of the Prophet (peace be on him). See Ibn Kathir's commentary on the verse. See also verse iv. 155.]
The root kafara has many shades of meaning: (1) to deny God's goodness, to be ungrateful, (2) to reject Faith, deny His revelation, (3) to blaspheme, to ascribe some limitation or attribute to God which is derogatory to His nature. In a translation, one shade or another must be put forward according to the context, but all are implied.