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According to most of the commentators (e.g., Tabari), this means that each of these two communities extends genuine friendship only to its own adherents - i.e., the Jews to the Jews, and the Christians to the Christians - and cannot, therefore, be expected to be really friendly towards the followers of the Qur'an. See also 8:73 , and the corresponding note.
Lit., "the evildoing folk": i.e., those who deliberately sin in this respect. As regards the meaning of the "alliance" referred to here, see 3:28 , and more particularly 4:139 and the corresponding note, which explains the reference to a believer's loss of his moral identity if he imitates the way of life of, or - in Qur'anic terminology - "allies himself" with, non-Muslims. However, as has been made abundantly clear in {60:7-9} (and implied in verse {57} of this surah), this prohibition of a "moral alliance" with non-Muslims does not constitute an injunction against normal, friendly relations with such of them as are well-disposed towards Muslims. It should be borne in mind that the term wali has several shades of meaning: "ally", "friend", "helper", "protector", etc. The choice of the particular term - and sometimes a combination of two terms - is always dependent on the context.
Wali means guardian, caretaker, protector, provider, ally, etc. The Prophet (ﷺ) for example says, “A woman should not get married without a wali.”—that is a guardian such as her father to represent her in the marriage and make sure she receives her full rights. The verse forbids Muslims from allying with the Jews and Christians (or anyone else) conspiring to persecute Muslims. On the other hand, as long as non-Muslims are not at war with Muslims or persecuting them, the Quran (60:8) commands Muslims to be kind and gracious to them.
That is, look not to them for help and comfort. They are more likely to combine against you than to help you. And this happened more than once in the lifetime of the Prophet, and in after-ages again and again. He who associates with them and shares their counsels must be counted as of them. The trimmer loses whichever way the wheel of fortune turns.