Overall meaning : Almighty Allah makes mention of yet another wicked group among the Jews who contrived an elaborate and deceitful scheme, thereby targeting Muslims with weak faith to perplex them and shake their confidence in their faith. After some consultation, they decided to openly pretend to accept what was sent down to the Prophet, may Allah bless him and grant him peace, in the early part of the day and then to reject it at the end of the day. In so doing, they hoped that the weak in faith would doubt and question their religion and then renounce it, seeing that the People of the Book themselves rejected it!
Allah, Glorified and Exalted be He, also mentions that they consulted one another and agreed to believe none except those who follow their own religion. In response to this statement of theirs, Allah Almighty includes a parenthetical clause in the context, instructing His Prophet, may Allah bless him and grant him peace, to say to them: Say to them, Muhammad, that Allah’s guidance is the only true guidance. He takes it upon Himself to guide the believers to have faith in what He has revealed to His Prophet.
Back to the context of the Jews consulting one another, they said, ‘Do not believe that anyone will ever be given the book, wisdom, virtues and honour like what you were given, or that anyone will ever dispute with you before your Lord. Your religion is more correct and better than theirs and you are more honourable in the sight of Allah.’ In response to this false claim, Allah instructs His Prophet, may Allah bless him and grant him peace, to say to them: Guidance, grace and favour can only be granted by Allah. He bestows all this upon whomever of His servants He wills; He is immensely bountiful and immeasurably beneficent. He knows full well who rightly deserves it and who does not deserve it. He singles out for His mercy and for prophethood and guidance whomever He wills; for His grace is indeed boundless.