"An Islamic government is charged with supporting all religions equally. It is a twist on the American ideal of separation of church and state, which forbids government from having any role in religion. In contrast, Islam says the state must support all religions!
The Islamic government is forbidden to seize the churches, synagogues, or temples of any group, nor can the government meddle in the appointment of religious leaders by each group. The treaty Prophet Muhammad, peace be upon him, made with a local Christian community is very clear: No bishop can be removed from his office and no church can be confiscated.
From the time of Prophet Muhammad (p) through the last Muslim Empire of the Ottomans Muslim rulers have been particularly concerned with the welfare of their non-Muslim subjects and their religious needs. For example, in the year 1076, the Muslim ruler of Bejaya, in present-day Algeria, wrote to Pope Gregory VII about the desire of the Christians in his land for a certain priest to be promoted to bishop. The pope was so overjoyed at this expression of religious respect that he wrote a beautiful letter in response, which concluded with the words: "We pray with heart and mouth that, after a long sojourn in this life, the same God may guide you to the bosom of happiness of the holy patriarch Abraham."
Has Muslim history had its share of despots and kings? Sure it has, but so has the Christian world. What is to be judged are the principles and not how faithfully they are applied."
- Yahiya Emerick, "The Complete Idiot's Guide to Understanding Islam, 2nd Edition"