"The House of War" or "The land of warfare." According to the Dictionary Ghiyasu 'l-Lughat Daru 'l-harb is "a country belonging to the infidels which has not been subdued by Islam." According to the Qamus, it is "a country in which peace has not been proclaimed between Muslims and unbelievers.
The theological basis for Daru 'l-Harb is the doctrine (found in the hadith as well as in the Qur'an) that the earth belongs to Allah and to his Messenger. In the Qur'an too Allah promises the world to his followers. This leads to the idea that jihad is a defensive war - liberating what already belongs to Allah and to his Umma. Hence the Muslims by waging jihad are taking back what is theirs. Even the whole world.
Since the world belongs to the Umma, any power that prevents them from having it is by definition oppressive, and upsurping the Umma's rights.
In the earliest hadiths, Umar says to his generals: When you will take the land that God gives you back...
This means that jihad - even offensive jihad is ALWAYS a defensive war of liberation. This is one of the theological factors that makes discussion of jihad so confusing.
This concept of the world belonging to Allah and his Messenger then became formalized into the doctrine of Daru 'l-Harb.
Territory not owned by the Muslims is by definition to be an object of war, until liberation takes place and territory is returned to its rightful owners - the Umma.
See also the entry DARU 'L-HARB in Hughes' DICTIONARY OF ISLAM for more information.
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