As for the position of the Muslims vis-a-vis the non-Muslims, the covenant signified that the Muslims were strong enough to set their own terms. It was made apparent to the polytheists that they would not be able to challenge Muslims’ authority.

Most of the chieftains and notables of Madinah had become Muslim, and there was no one capable of leading those opposed to Islam in open rebellion. Realising this, the Prophet wanted to ensure that non-Muslims who were discontent with the new power structure did not look to Makkah for help. He made the non-Muslims agree to the following stipulation: “We will not shelter the Quraysh, nor will we refuse to offer protection to Muslims.”

The Prophet drew up a separate covenant between the Muslims and the Jews:

1) The Jews and Muslims would live together as two separate nations, each with its own way of life, and each in charge of its own financial affairs.

2) Both nations would jointly defend the city from attack, and each would defend its own people.

3) Both nations would coexist peacefully, and neither was to meddle in the affairs of the other or in any way attempt to destabilise the other.

4) Neither nation was responsible for the misdeeds of the other.

5) The oppressed would be helped and supported.

6) Both nations would bear the expenses of war.

7) Subversion and unwarranted bloodshed were unlawful for both nations. 

8) All disputes would be referred to Allah and His Prophet

9) The Quraysh and their allies were not to be aided or given refuge.

10) The covenant would not provide any safeguard to wrongdoers or criminals.

This covenant united the three communities of Madinah and defined the Prophet as the undisputed head of state. Once everyone understood his rights and responsibilities, the Prophet began to actively call the other two communities to Islam. Many embraced Islam, and those who preferred their own religion lived in peace with the ruling Muslims. There were others, however, who were interested in neither Islam nor peaceful coexistence. A faction from them became Muslim so as to weaken Islam from within. They were later known as the Hypocrites. Their leader was Abdullah bin Ubayy, and together with the group of hostile non-Muslims, they represented the greatest threat to the security of Madinah.