In the beginning, the Jews of Medina lived in peace alongside the Muslims after the siege of Medina. The Qurayshi from Mecca besieged Medina from the north whilst the Prophet (PBUH) lived in it but the Muslim’s quickly dug trenches and caused a headlock and standstill. The Jews in the south of Medina were not inclined to attack the Muslims, especially because of the treaty they had made between them and the Muslims, but after the Qurayshi accused them of treachery they changed their minds. Ultimately, the army against Medina broke up and they drafted the Treaty of Hudaybiyah that would allow the inhabitants of Medina to travel to Mecca for their pilgrimage once a year.
In the aftermath, the Jews on the south of Medina locked themselves up in their forts but the Muslims besieged them shortly after the Qurayshi had retreated. The Prophet (PBUH) suggested to solve their issues with an arbitrator of their own choosing. They chose Sa’ad ibn Muadh who decreed to banish the remaining women and children and sentenced all men to death in accordance with the Torah:
10 When you march up to attack a city, make its people an offer of peace. 11 If they accept and open their gates, all the people in it shall be subject to forced laborand shall work for you. 12 If they refuse to make peace and they engage you in battle, lay siege to that city. 13 When the Lord your God delivers it into your hand, put to the sword all the men in it. 14 As for the women, the children, the livestockand everything else in the city, you may take these as plunder for yourselves. And you may use the plunder the Lord your God gives you from your enemies.
It is reflected later by Muslim scholars that had they chosen Prophet Muhammad (PBUH) as their arbitrator their sentence would have been more lenient. In fact, not all Jews were sentenced to die or banishment but were sent to Khaybar, an oasis north of Medina.
After returning to routines and their normal lives, the Jews felt like they had surrendered to the Muslims and did not like the shit of power that had occurred. Therefore, many of the Jewish tribes around Medina attacked the Prophet’s (PBUH) city and its inhabitants. Jewish marauders carried out raiding expeditions and many on their way to or from Medina were intercepted and killed. Prophet Muhammad (PBUH) decided to put an end to the abuse and set out for Khaybar with 1600 men and women soldiers and 100 horses.
The conquest of Khyber conferred unlimited benefits upon the Muslims; some of them were:
1.Immense quantities of gold and silver that the Jews had been accumulating for many generations.
2.The finest arsenals of Arabia containing the newest weapons of the times such as swords, spears, lances, maces, shields, armor, bows and arrows.
3.Vast herds of horses, camels and cattle, and flocks of sheep and goats.
4.Rich arable lands with palm groves.
Excerpt from A Restatement of the History of Islam and Muslims by Sayyid Ali Ashgar Razwy
Another Jewish settlement near Khaybar, called Fadak, surrendered voluntarily and sent envoys to negotiates terms of peace. The Prophet (PBUH) accepted their surrendered and allowed them to retain the right of their land as long as they became subjects of the Islamic State (NOT convert).