There is absolutely no enmity between Muslims and Jews as far as Islam concerns. The fact that many of the Jews at the time of the Prophet (sws) were among his enemies does not make all the Jews of all time enemies of Muslims. This is a mindset that both Jews and Muslims need to get rid of.
If all Jews are enemies of Muslims and they are supposed to be killed then why the Prophet (sws) did not kill all of them in his time? Why were they given a chance to live peacefully with Muslims and why even after they betrayal to Muslims the policy was not to kill them all?
The truth of the fact is that in this materialistic and secular world Muslims and Jews are among a very few religious groups who still believe in one God and practice what they know as His Sharia. Instead of waiting for the end of the world to kill each other we need to get closer and try to be united against the secular world.
According to the Qur'an there can only be three justified reason for killing:
1. When it is executing a murderer (that is supposed to be done by the state).
2. when it is executing those who create Fesad (anarchy and evil) in the land (that again is supposed to be done by the state).
3. When people are convinced about the truth of the message of a Messenger of God but still do not accept it due to their arrogance (in which case God may direct His messenger to attack and kill these people with the support of his followers). In the case of Ahl Al-Kitab, the fact that these people (at least according to themselves) believe in One God is so important that their faith with regard to this point is an exception. According to the Qur'an, instead of killing them, the Messenger and his companions were supposed to have them pay tax in a state of subjection.
Of the above, the 1st and the 2nd are applicable to any one, being a Jew or a Muslim, and the 3rd is no longer applicable.
Any Hadith narrated from the Prophet should be interpreted in accordance to the above rules that are derived from the Qur'an and if not possible then its reliability will be under question.