Contrary to common belief, all non-Muslims are not Kafirs. Kafir literally means a 'denier'. This term was only used for certain contemporaries of the Prophet.
The word kafir has never been used in the Quran to mean either an unbeliever or an infidel. In fact, this term was applied solely to contemporaries of the Prophet, in particular, to people from the tribe of the Quraysh. The Prophet peacefully conveyed to them the divine message over a long period of time, but they refused to accept the truth of his words. God, therefore, declared those people, the contemporaries of the Prophet as Kafirs. The use of the word kafir for anyone other than the contemporaries of the Prophet is not, therefore, permissible.
The most important thing to be grasped on this subject is that the word kafir denotes an individual rather than a certain race or community. It is in no way a group appellation. However, the generally held view is that those who are not Muslims are kafirs. This is an entirely baseless supposition. The word kafir is not synonymous with non-Muslim. According to Islam, the truth is that those who are not Muslims are simply human beings (insaan). We must look at them from that angle, rather than classify them as kafirs. The right way, according to Islam, is to call each community or group by the name it has adopted for itself. For instance, America will be called America rather than the country of the kafirs and so on.
The Prophet of Islam received prophethood in 610. A.D. At that time all the people, save himself, were non-Muslims. When he addressed them to convey his message, he never said, 'O Kafirs', but rather 'O man' or 'O people' using the plural form. He continued to use this form of address throughout his life. That is, to him, all those who had not entered the fold of Islam were simply human beings.
There are a number of examples in the Quran of references to communities or groups of those times in which the names, they themselves had adopted, were used. Never once was the word Kafir used. Here we give some examples from the sources of Islam.
In the Meccan period, certain verses of the Quran were revealed which mention non-Muslims giving outside Arabia. For instance, at the beginning of Chapter 30, the Quran mentions the Byzantines who had temporarily been conquered by the Persians. The Byzantines at that time were Christians, but the verses do not say "the Byzantine kafirs who have been defeated," but simply "the Byzantines who have been defeated". Similarly chapter 105 of the Quran mentions Abraha, the non-Muslim ruler of Yaman, but it does not refer to him as a 'kafir ruler of Yaman', but rather as the "man of the elephants". (Abraha's soldiers were mounted on elephants when he came to Makkah to attack the Kabah).
There are certain injunctions in the Quran such as: "Fight the leaders of disbelief." (9:12)
This verse does not mean that you should start fighting whoever appears to you to be a 'Kafir'. Such a war has never been fought in Islam, nor is it lawful in Islam. It would be sheer madness to take this Quranic verse in any such general sense.
In this verse of the Quran, the word 'Kufr' is relates to certain events. That is, the cause of war is not the fact of others being "Kafirs", but rather to their being aggressors. That is to say that this verse means that those of the deniers, who have waged war with you must certainly be fought, but as a matter of defence. The actual meaning of the verse is clear from the next verse of the Quran itself.
At another place, the Quran has this to say: "Fight in God's cause against those who fight you, but do not overstep the limits." (2:190) That is, do not be an aggressor, fight only in defence. There are a number of such verses in the Quran, which show that war in Islam is not against Kafirs per se, but against aggressors. If someone is a 'Kafir', Muslims have been commanded to communicate to him the message of truth, peacefully, and as a well-wisher, rather than wage a war against him.
To sum up, according to the Quran, kafirs were solely those of the Prophet's contemporaries, who were directly called upon to accept the truth by the Prophet himself, and who still did not accept it. Calling anyone else a kafir, besides those particular individuals, is in no way lawful in Islam. Kafir was a term of reference, restricted in place and time, and which is no longer relevant. Now all are equally human beings and they have to be dealt with as human beings.
Similarly, it is also unlawful or haram in Islam to single out some individual or group as unbelievers and then hate them or wage war against them. According to Islam, those who are not Muslims are still human beings. It is the responsibility of Muslims to convey to them the divine message peacefully and affectionately. War in Islam can be waged only against an attacker and nobody else.