The Quran encourages lying:
Muslim scholars teach that Muslims should generally be truthful to each other, unless the purpose of lying is to smooth over differences.
There are two forms of lying to non-believers that are permitted under certain circumstances, taqiyya and kitman. These circumstances are typically those that advance the cause Islam - in some cases by gaining the trust of non-believers in order to draw out their vulnerability and defeat them.
From The Quran:
Quran (16:106) - Establishes that there are circumstances that can compel a Muslim to tell a lie.
Quran (3:28) - This verse tells Muslims not to take those outside the faith as friends, unless it is to guard themselves.
Quran (9:3) - ...Allah and His Messenger are free from liability to the idolaters... The dissolution of oaths with the pagans who remained at Mecca following its capture. They did nothing wrong, but were evicted anyway.
Quran (40:28) - A man is introduced as a believer, but one who must hide his faith among those who are not believers.
Quran (2:225) - Allah will not call you to account for thoughtlessness in your oaths, but for the intention in your hearts The context of this remark is marriage, which explains why Sharia allows spouses to lie to each other for the greater good.
Quran (66:2) - Allah has already ordained for you, (O men), the dissolution of your oaths
Quran (3:54) - And they (the disbelievers) schemed, and Allah schemed (against them): and Allah is the best of schemers. The Arabic word used here for scheme (or plot) is makara, which literally means deceit. If Allah is deceitful toward unbelievers, then there is little basis for denying that Muslims are allowed to do the same. (See also 8:30 and 10:21)
Taken collectively these verses are interpreted to mean that there are circumstances when a Muslim may be compelled to deceive others for a greater purpose.
From the Hadith:
Bukhari (52:269) - The Prophet said, War is deceit. The context of this is thought to be the murder of Usayr ibn Zarim and his thirty unarmed men by Muhammads men after he guaranteed them safe passage (see Additional Notes below).
Bukhari (49:857) - He who makes peace between the people by inventing good information or saying good things, is not a liar. Lying is permitted when the end justifies the means.
Bukhari (84:64-65) - Speaking from a position of power at the time, Ali confirms that lying is permissible in order to deceive an enemy.
Muslim (32:6303) - ...he did not hear that exemption was granted in anything what the people speak as lie but in three cases: in battle, for bringing reconciliation amongst persons and the narration of the words of the husband to his wife, and the narration of the words of a wife to her husband (in a twisted form in order to bring reconciliation between them).
Bukhari (50:369) - Recounts the murder of a poet, Kab bin al-Ashraf, at Muhammads insistence. The men who volunteered for the assassination used dishonesty to gain Kabs trust, pretending that they had turned against Muhammad. This drew the victim out of his fortress, whereupon he was brutally slaughtered despite putting up a ferocious struggle for his life.
From Islamic Law:
Reliance of the Traveler (p. 746 - 8.2) - Speaking is a means to achieve objectives. If a praiseworthy aim is attainable through both telling the truth and lying, it is unlawful to accomplish through lying because there is no need for it. When it is possible to achieve such an aim by lying but not by telling the truth, it is permissible to lie if attaining the goal is permissible (N:i.e. when the purpose of lying is to circumvent someone who is preventing one from doing something permissible), and obligatory to lie if the goal is obligatory... it is religiously precautionary in all cases to employ words that give a misleading impression...
One should compare the bad consequences entailed by lying to those entailed by telling the truth, and if the consequences of telling the truth are more damaging, one is entitled to lie.
Muslims are allowed to lie to unbelievers in order to defeat them. The two forms are:
Taqiyya - Saying something that isnt true.
Kitman - Lying by omission. An example would be when Muslim apologists quote only a fragment of verse 5:32 (that if anyone kills it shall be as if he had killed all mankind) while neglecting to mention that the rest of the verse (and the next) mandate murder in undefined cases of corruption and mischief.
Though not called Taqiyya by name, Muhammad clearly used deception when he signed a 10-year treaty with the Meccans that allowed him access to their city while he secretly prepared his own forces for a takeover. The unsuspecting residents were conquered in easy fashion after he broke the treaty two years later, and some of the people in the city who had trusted him at his word were executed.
Another example of lying is when Muhammad used deception to trick his personal enemies into letting down their guard and exposing themselves to slaughter by pretending to seek peace. This happened in the case of Kab bin al-Ashraf (as previously noted) and again later against Usayr ibn Zarim, a surviving leader of the Banu Nadir tribe, which had been evicted from their home in Medina by the Muslims.
At the time, Usayr ibn Zarim was attempting to gather an armed force against the Muslims from among a tribe allied with the Quraish (against which Muhammad had already declared war). Muhammads emissaries went to ibn Zarim and persuaded him to leave his safe haven on the pretext of meeting with the prophet of Islam in Medina to discuss peace. Once vulnerable, the leader and his thirty companions were massacred by the Muslims with ease, belying the probability that they were mostly unarmed, having been given a guarantee of safe passage (Ibn Ishaq 981).
Such was the reputation of Muslims for lying and then killing that even those who accepted Islam did not feel entirely safe. The fate of the Jadhima is tragic evidence for this. When Muslim missionaries approached their tribe one of the members insisted that they would be slaughtered even though they had already converted to Islam to avoid just such a demise. However, the others were convinced that they could trust the Muslim leaders promise that they would not be harmed if they simply offered no resistance. (After convincing the skeptic to lay down his arms, the unarmed men of the tribe were quickly tied up and beheaded - Ibn Ishaq 834 & 837).
Todays Muslims often try to justify Muhammads murder of poets and others who criticized him at Medina by saying that they broke a treaty by their actions. Yet, these same apologists place little value on treaties broken by Muslims. From Muhammad to Saddam Hussein, promises made to non-Muslim are distinctly non-binding in the Muslim mindset.
Leaders in the Arab world routinely say one thing to English-speaking audiences and then something entirely different to their own people in Arabic. Yassir Arafat was famous for telling Western newspapers about his desire for peace with Israel, then turning right around and whipping Palestinians into a hateful and violent frenzy against Jews.
The 9/11 hijackers practiced deception by going into bars and drinking alcohol, thus throwing off potential suspicion that they were fundamentalists plotting jihad. This effort worked so well, in fact, that even weeks after 9/11, John Walsh, the host of a popular American television show, said that their bar trips were evidence of hypocrisy.
The transmission from Flight 93 records the hijackers telling their doomed passengers that there is a bomb on board but that everyone will be safe as long as their demands are met. Obviously none of these things were true, but these men, who were so intensely devoted to Islam that they were willing to slay and be slain for the cause of Allah (as the Quran puts it) saw nothing wrong with employing Taqiyya in order to facilitate their mission of mass murder.
The Islamic Society of North America (ISNA) insists that it has not now or ever been involved with the Muslim Brotherhood, or supported any covert, illegal, or terrorist activity or organization. In fact, it was created by the Muslim Brotherhood and has bankrolled Hamas. At least nine founders or board members of ISNA have been accused by prosecutors of supporting terrorism.
Prior to engineering several deadly terror plots, such as the Fort Hood massacre and the attempt to blow up a Detroit-bound airliner, American cleric Anwar al-Awlaki was regularly sought out by NPR, PBS and even government leaders to expound on the peaceful nature of Islam.
The near absence of Quranic verse and reliable Hadith that encourage truthfulness is somewhat surprising, given that many Muslims are convinced that their religion teaches honesty. In fact, it is because of this ingrained belief that many Muslims are quite honest. When lying is addressed in the Quran, it is nearly always in reference to the lies against Allah - referring to the Jews and Christians who rejected Muhammads claim to being a prophet.
Finally, the circumstances by which Muhammad allowed a believer to lie to a non-spouse are limited to those that either advance the cause of Islam or enable a Muslim to avoid harm to his well-being (and presumably that of other Muslims as well). Although this should be kept very much in mind when dealing with matters of global security, such as Irans nuclear intentions, it is not grounds for assuming that the Muslim one might personally encounter on the street or in the workplace is any less honest than anyone else.