Praise be to Allah.
Interacting with Jews, Christians and all other kuffaar is subject to guidelines and regulations that are set out in Islamic sharee’ah. These guidelines include the following:
It is permissible to speak with the kaafirs and to discuss permissible matters with him.
It is not permissible to take the kuffaar as close friends (awliya’). Taking them as close friends may happen in many ways, such as mixing with them, feeling comfortable with them, living with them, taking them as close friends, loving them, preferring them over the believers, and so on. Allaah says (interpretation of the meaning):
“You (O Muhammad) will not find any people who believe in Allaah and the Last Day, making friendship with those who oppose Allaah and His Messenger (Muhammad), even though they were their fathers or their sons or their brothers or their kindred (people)”
It is permissible to interact with the kuffaar to buy, sell, lend and so on. It was narrated in saheeh reports that the Prophet (peace and blessings of Allaah be upon him) borrowed a weapon from Safwaan ibn Umayyah, and that he bought food from the Jews.
With regard to how to treat a wife from among the people of the Book (i.e., a Jewish or Christian woman), Allaah says in His Book (interpretation of the meaning):
“Allaah does not forbid you to deal justly and kindly with those who fought not against you on account of religion nor drove you out of your homes. Verily, Allaah loves those who deal with equity”
So it is permissible to treat a Jewish or Christian wife justly and kindly, and there is nothing wrong with that; it does not come under the heading of the type of close friendship and strong bonds that is forbidden.
Al-Kaasaani said in Badaa’i al-Sanaa’i’ (2/270):
It is not permissible for a Muslim to marry a mushrik woman, because Allaah says (interpretation of the meaning):
“And do not marry Al-Mushrikaat (idolatresses) till they believe (worship Allaah Alone)”
But it is permissible to marry a woman from among the people of the Book, because Allaah says (interpretation of the meaning):
“(Lawful to you in marriage) are chaste women from the believers and chaste women from those who were given the Scripture (Jews and Christians) before your time”
The difference is that the basic principle is that a Muslim is not permitted to marry a kaafir, because marrying a kaafir woman and mixing with her at the same time when there is religious animosity will not produce the tranquility and love which are the basic purpose of marriage, but it is permitted to marry a woman from among the People of the Book in the hope that she will become Muslim, because she believes in the Books of the Prophets and Messengers in general, but she does not believe in a comprehensive and correct manner, because what she was taught is different from what is real. It is likely that when the facts are pointed out to her, she will accept them. So her husband should call her to Islam and tell her how things really are. So when a Muslim marries such a woman there is the hope that she will become Muslim, so it is permissible to marry them for this purpose. This is unlike the case of a mushrik woman, because by choosing to associate others in worship with Allaah and not to believe in the Prophets and Messengers, this indicates that she does not pay any attention to proof and evidence and will not respond to da’wah, and will rather continue to follow the way of her forefathers and to follow her whims and desires. So there will remain that religious animosity which will not produce the tranquility and love which are the basic purpose of marriage, so it is not permissible to marry such a woman.
And he said in Haashiyat al-‘Adawi (1/273):
The phrase “we forsake those who disbelieve in You” means we cast aside any positive feelings towards those who worship anyone other than You, and we will not love his way or feel any inclination towards it. But this does mean that we are not allowed to marry a woman from among the people of the Book, because marrying her may attract her to the religion of Islam, as marriage is a type of interacting with others and what is meant here is to hate the way of kufr.
For more information please see questions no. 34559, 11793, 10342, 26721, 23325.