Koran 9:29 - Fight those who believe not in God and the Last Day and do not forbid what God and His Messenger have forbidden -- such men as practise not the religion of truth, being of those who have been given the Book -- until they pay the tribute out of hand and have been humbled.
The verse seems pretty clear to me, the Koran says to attack people who are not of the 'religion of truth' and explicitly says to attack the 'people of the Book'. I also believe this is the first passage in the Koran calling for warfare against Jews and Christians, but I could be wrong on that.
It's also interesting that a verse prior to 9:29 speaks of the battle of Hunayn so, it is clear from the historical context that 9:29 could not possibly be linked to the first 28 verses in the ninth chapter - which describes relations between the Muslims and Meccan pagans before and during the conquest of Mecca.
But now, let's look to see what Muslim scholars actually have to say about this passage:
The Reliance of the Traveler, which an online description says the following of the legal manual, 'Umdat as-Salik wa 'Uddat an-Nasik (Reliance of the Traveller and Tools of the Worshipper, also commonly known by its shorter title Reliance of the Traveller) is a classical manual of fiqh for the Shafi'i school of Islamic jurisprudence' and 'The book was translated by the American Muslim scholar Shaykh Nuh Ha Mim Keller in 1991 and became the first translation of a standard Islamic legal reference in a European language to be certified by Al-Azhar.'
That sounds pretty scholarly to me, but maybe I'm just easily impressed. However, I'll go ahead and quote the contents of this Sunni Muslim legal manual to verify that mainstream Muslims interpret the 'sword verse' in the Koran to mean warfare against unbelievers:
@O9.8: The Objectives of Jihad
The caliph (o25) makes war upon Jews, Christians, and Zoroastrians (N: provided he has first invited them to enter Islam in faith and practice, and if they will not, then invited them to enter the social order of Islam by paying the non-Muslim poll tax (jizya, def: o11.4) -which is the significance of their paying it, not the money itself-while remaining in their ancestral religions) (O: and the war continues) until they become Muslim or else pay the non-Muslim poll tax (O: in accordance with the word of Allah Most High,
"Fight those who do not believe in Allah and the Last Day and who forbid not what Allah and His messenger have forbidden-who do not practice the religion of truth, being of those who have been given the Book-until they pay the poll tax out of hand and are humbled" (Koran 9.29)
http://www.nku.edu/~kenneyr/Islam/Reliance.html
I will also quote from a Saudi scholar of Islam and what he writes on the rulings of Jihad. To me, it looks like he says quite clearly that there is a consensus among Muslim scholars that Jihad warfare against unbelievers is an obligation for the community of Muslims (Ummah). But perhaps shafique has another interpretation of what the good sheik writes (or he'll simply dismiss the Muslim interpretation of 9:29 and label the Muslim perspective 'Orientalist' once more):
Some of the reasons why jihad for the sake of Allaah is prescribed in Islam are as follows:
1 – The main goal of jihad is to make the people worship Allaah alone and to bring them forth from servitude to people to servitude to the Lord of people. Allaah says (interpretation of the meaning):
“And fight them until there is no more Fitnah (disbelief and worshipping of others along with Allaah) and (all and every kind of) worship is for Allaah (Alone). But if they cease, let there be no transgression except against Az-Zaalimoon (the polytheists, and wrong-doers)”
[al-Baqarah 2:193]
“And fight them until there is no more Fitnah (disbelief and polytheism, i.e. worshipping others besides Allaah), and the religion (worship) will all be for Allaah Alone [in the whole of the world]. But if they cease (worshipping others besides Allaah), then certainly, Allaah is All-Seer of what they do”
[al-Anfaal 8:39]
Ibn Jareer said:
So fight them until there is no more shirk, and none is worshipped except Allaah alone with no partner or associate, and trials and calamities, which are disbelief and polytheism, are lifted from the slaves of Allaah on earth, and religion is all for Allaah alone, and so that obedience and worship will be devoted to Him alone and none else.
Ibn Katheer said: Allaah commands us to fight the kuffaar so that there will be no fitnah, i.e., shirk, and the religion will all be for Allaah alone, i.e., the religion of Allaah will prevail over all other religions.
The Prophet (peace and blessings of Allaah be upon him) said: “"I have been commanded (by Allaah) to fight the people until they testify that there is no god but Allaah and that Muhammad is the Messenger of Allaah, and they establish regular prayer and pay zakaah, then if they do that, then they save their lives and property from me except for Islamic laws and then their reckoning will be with Allaah." Narrated by al-Bukhaari (24), Muslim (33).
And he (peace and blessings of Allaah be upon him) said: “I have been sent just before the Hour with the sword, so that Allaah will be worshipped alone with no partner or associate.”
Narrated by Ahmad, 4869; classed as saheeh by al-Albaani in Saheeh al-Jaami’, 2831.
This purpose of jihad was present in the minds of the Sahaabah (may Allaah be pleased with them) during their battles with the enemies of Allaah. Al-Bukhaari (2925) narrated that Jubayr ibn Hayyah said: ‘Umar sent people to all the regions to fight the mushrikeen… so ‘Umar recruited us and appointed al-Nu’maan ibn Muqarrin to lead us. When we were in the land of the enemy, the representative of Chosroes came out to us with forty thousand troops. An interpreter stood up and said: “Let one of you speak to me.” Al-Mugheerah said: “Ask whatever you want.” He asked, “Who are you?” He (al-Mugheerah) said: “We are some people from among the Arabs. We used to lead a harsh and miserable life, sucking on animal skins and date stones because of hunger, wearing clothes made of camel and goat hair, worshipping trees and rocks. While we were in this state, the Lord of the heavens and the earth, exalted be His name and glorified be His greatness, sent to us a Prophet from amongst ourselves, whose father and mother we know. Our Prophet, the Messenger of our Lord, (peace and blessings of Allaah be upon him), commanded us to fight you until you worship Allaah alone or pay the jizyah. Our Prophet (peace and blessings of Allaah be upon him) told us the message from our Lord, that whoever among us is killed will go to Paradise to enjoy delights such as no one has ever seen, and whoever among us is left will become your master.”
This is the truth that the Sahaabah and leaders of the Muslims proclaimed in their military campaigns.
Rab’i ibn ‘Aamir said, when Rustam the commander of the Persian armies asked him, “Why have you come?”: “Allaah has sent us to bring forth whomsoever He wills from the worship of man to the worship of Allaah.
When ‘Uqbah ibn Naafi’ reached Tangiers, he rode his horse into the water until the water was up to its chest, then he said: “O Allaah, bear witness that I have done my utmost, and were it not for this sea I would have travelled throughout the land fighting those who disbelieve in You, until none is worshipped except You.”
http://www.islam-qa.com/en/ref/34647/jihaad
Again, it is noteworthy that not only does the Saudi scholar provide his views on Jihad, but he also quotes several Muslim scholar who are giants in the field of Islamic theology and law.
Anyways, I'll wait for shafique's refutation of these quotes and for him to provide the mainstream Muslim perspective of Jihad warfare.