Let me try to explain it to you this way, amb.
See, the first verse you quoted in that mashup of yours, “When thy Lord inspired the angels, (saying): I am with you. So make those who believe stand firm. I will throw fear into the hearts of those who disbelieve. Then smite the necks and smite of them each finger. ” is Sura VIII, Verse 12. It's not a command to Muslims. It was describing what Allah told his
angels to do, to help Muslims in a particular battle.
And what battle was that? The Battle of Badr, fought in 624 AD. And to know what that battle was all about, why it was fought, and who fought it, a little history lesson is in order.
Muhammad ibn Abdullah was born in Mecca around 570 AD. At the time, Mecca was ruled by the Quraysh, one of the many polytheistic, pagan pre-Islamic tribes that inhabited the Arabian Peninsula. The Quraysh tribe itself was broken up into many clans. Muhammad's clan, the Banu Hashim, was considered a noble clan because of their hereditary duty to manage the pilgrims who would come to visit the holy site of the Kaabah, the sacred site where many idols of the pagan Arabians were kept.
Muhammad's father died before he was born, and his mother died not long after. Muhammad was taken in and raised by his uncle, Abu Talib, a powerful figure in the noble Banu Hashim clan. In about 613 AD, Muhammad started preaching about the visions from Allah he said he'd started to receive starting three years before. He gained a few followers, the first Muslims, but both they and he were roundly mocked and abused by the pagan polytheists of Mecca. The abuse worsened as Muhammad's following grew, until even the other Quraysh clans started to see him as a threat, especially once he started preaching against the old idol worship.
As the years passed, the abuse got even more severe, with several of his followers killed. The political influence of Muhammad's powerful uncle protected Muhammad himself, but things got so bad for his followers that Muhammad sent several of them away, to live in what is now Ethiopia, under the protection of the Christian emperor there. In 619, though, Muhammad's uncle died, leaving him without any protection against the other Quraysh clans. By 622, things had gotten so bad that many of the early Muslims had been killed, and Muhammad decided to flee with them when word spread that he was going to be assassinated. This was the Hijra, the date from which years in the Muslim calendar (After Hijra, or AH), are counted.
Muhammad and his band of early Muslims made their way to Yathrib, a nearby city now known as Medina. At the time they arrived, Yathrib was stricken by intertribal fighting, and troubles with the sizable Jewish minority. Muhammad brokered peace among the groups contending with each other, under the
Constitution of Medina. Under the Constitution, each clan of Medina would be bound to the others under a single government, and established Jews as a protected community.
The latter is especially notable, in light of your “Islam says kill the unbelievers” clam. Muhammad's Constitution says, explicitly, “Those Jews who follow [the leadership of] the Believers will be helped and will be treated with equality. (Social, legal and economic equality is promised to all loyal citizens of the State)”, “No Jew will be wronged for being a Jew,” , “The enemies of the Jews who follow us will not be helped,” and “The Jews of [all the clans] will be treated as one community with the Believers. The Jews have their religion. This will also apply to their freedmen. The exception will be those who act unjustly and sinfully. By so doing they wrong themselves and their families.”
It also, and this important for the battle of Badr, pretty much established the Quraysh of Mecca as the sworn enemies of Medina and all its united clans and peoples under Muhammad.
For the next couple of years, Mecca and Medina were in a sort of cold war. Occasionally raiding expeditions would be sent by one side or the other, but there was never any true fighting despite there being plenty of animosity. All this simmered until 624 (AH 2), when a certain Meccan trade caravan was returning from Syria.
The commander of the caravan, Abu Sufyan, was convinced that the Medinans would raid him, and before he reached Mecca he demanded an army for protection. The Quraysh saw this as a good opportunity to finally crush the Muslims of Medina once and for all, and assembled a large (for the time and place) force, and set out towards Medina. When Muhammad heard about this, he assembled his own force, but it was far smaller, numbering only about 300, and set out to meet the approaching army.
At Badr (a location of water wells used by various trade caravans passing through the desert), the scouts of the Muslim Medina army encountered some Meccan troops. At first, the Muslims thought they'd encountered scouts from the caravan at the heart of this mess. The caravan, though, was safely behind the Meccan army. Despite having been told of this and that the entire "protect the caravan" justification for sending out the army was now moot, only a few Quraysh (including members of Muhammad's own clan, the Banu Hashim) returned to Mecca. The rest, about 1000 strong, continued on, determined to crush the Muslims of Medina.
And unfortunately for Muhammad's army of 300, it was the scouts of this force of 1000 that they encountered at Badr, not the lightly-defended caravan. Despite being outnumbered by more than three to one, however, the Muslim army of Medina handed the Quraysh army of Mecca a resounding defeat. Practically overnight, Muhammad went from an exiled religious kook with a ragtag army to the powerful leader of a major force in the area, having proven it could not just take on but defeat the armies of such major powers as Mecca.
In the aftermath of the battle, the astonished Muslims couldn't quite believe that their tiny force had defeated the Meccan army, and so decisively too. Muhammad's resulting speech to them in that aftermath, explaining how Allah had been responsible for their victory, is what became the 8th Sura of the Qu'ran. That twelfth verse you quoted, the one that you think demands of Muslims that they cut the heads and fingers off of all unbelievers, was actually from Muhammad's description of how Allah sent angels to bolster the Muslim army fighting against the Meccan army. It's those angels who were hacking off fingers and heads, not Muslims, and Muhammad was describing what had
been done, not what
to do.
Emphasizing this is the fact that a number of Quraysh prisoners were taken in the aftermath of the battle. The leaders of the army were executed, but the Muslim war council could not agree about how to treat the regular soldiers that had been taken captive. Some argued that they should all be executed, while others said they should be released and sent back to Mecca unharmed. Muhammad himself made the final decision regarding the fate of the prisoners of war from the battle of Badr.
The prisoners were released and sent home.
