It is narrated from Sayyiduna Jabir (may Allah be pleased with him) that some Jews greeted the Prophet (peace and blessings of Allah be upon him) and said: «السام علیکم». The Prophet (peace and blessings of Allah be upon him) replied: “«وعلیکم».” Sayyidah Aisha (may Allah be pleased with her) became very angry and said: (O Messenger of Allah!) Did you not hear what they said? The Prophet (peace and blessings of Allah be upon him) said: “Why not, I heard it and I have returned those words upon them. Our supplication against them is accepted, and their supplication against us is not accepted.”
Hadith Referenceالادب المفرد / كتاب أهل الكتاب / 1110
Hadith Gradingالألبانی:صحيح
Hadith Takhrij«صحيح : أخرجه مسلم ، كتاب السلام : 2166»
Explanation & Benefits
Shaykh Maulana Usman Muneeb
Benefits and Issues: Whether a disbeliever says "As-Samu Alaikum" or "As-Salamu Alaikum," one should suffice with replying "Wa Alaikum." There is no need to go into further detail or become entangled in the matter. If, in a certain area, there is a need to initiate (greeting), then instead of the (Islamic) greeting, one should suffice with gestures or other words.
Source: Fadlullah al-Ahad: Urdu Commentary on al-Adab al-Mufrad, Page: 1110