How can one reconcile the two noble verses: "Indeed, those who believed and those who were Jews or Christians or Sabeans [before Prophet Muhammad], those who believed in Allah and the Last Day and did righteousness - their reward is with their Lord, and no fear will there be concerning them, nor will they grieve" and "And whoever desires other than Islam as religion - never will it be accepted from him"?

There is no contradiction between the two verses. The verse in Surah Al-Baqarah: {Indeed, those who believed and those who were Jews or Christians or Sabeans – those who believed in Allah and the Last Day and did righteousness – will have their reward with their Lord, and no fear will there be concerning them, nor will they grieve} means that whoever among the Jews, Christians, and Sabeans believes in Muhammad (peace be upon him) and what he brought, and performs righteous deeds, will have their reward with Allah. This includes those who believed in their prophet during his time and did not live to see any other, or those who did live to see another and believed in him. As for the verse in Surah Aal-Imran: {And whoever desires a religion other than Islam, it will never be accepted from him, and in the Hereafter he will be among the losers}, it indicates that Islam is the true religion with which Allah sent all the prophets. The true Muslim is one who is sincere in their deeds, along with faith, even before the prophethood of Muhammad (peace be upon him). So, whoever does not believe in him after his prophethood is among the disbelievers, due to the saying of the Prophet (peace be upon him): "By Him in whose hand is the soul of Muhammad, no one from this nation, neither a Jew nor a Christian, hears about me and then dies without believing in that with which I was sent, except that he will be among the people of the Fire."