Hasan al-Basri said: Allah Almighty says: "When you are greeted, then return the greeting in a better manner." (Hasan al-Basri said:) What it means is this: do so with the people of Islam. Allah Almighty says: "Or return it." Hasan al-Basri said: What it means is this: give the people of polytheism the same reply.
Abu Ya'la recorded it, and its narrators are thiqat (trustworthy).
Hadith Referenceمجمع الزوائد ومنبع الفوائد / كتاب التفسير / 10938