The Koran does say that 'people of the book' should be treated better then others. But that is only in comparison to Hindus, Pagans and atheists, who are to given a choice between death and conversion.
There are some passages in the Koran that suggest dealing with Jews and Christians, such as this.
"Dispute not with the People of the Book
save in the fairer manner, except for
those of them that do wrong; and say,
We believe in what has been sent down
to us, and what has been sent down to you:
Our God and your God is One, and to Him
we have surrendered."
But for every such quote there is one like this.
"The unbelievers of the People of the Book
and the idolaters shall be in the Fire of Hell
therein dwelling for ever;
those are the worst of creatures. "
Here are two quotes from the Koran which specify that Muslims can not be friends with anybody that is not a Muslim, including Jews and Christians.
"O believers, take not as your friends those
of them, who were given the Book before you,
and the unbelievers, who take your religion
in mockery and as a sport "
"O believers, take not Jews and Christians
as friends; they are friends of each other.
Whoso of you makes them his friends
is one of them "
And here are two quotes where the Koran rejects fundamental principles of Christianity and Judaism.
"for their saying, "We slew the Messiah,
Jesus son of Mary, the Messenger of God."
Yet they did not slay him, neither crucified him,
only a likeness of that was shown them"
"No: Abraham in truth was not a Jew,
neither a Christian; but he was a Muslim
and one pure of faith; certainly he was never
of the idolaters."
The end result is that the Muslim faith tells it's followers to tolerate Christians and Jews as second class citizens, as long as they do nothing to anger the Muslims and pay their heavy taxes (jizya) on time.
Jay