Should anything be said to a disbeliever if he sneezes, and should one supplicate for his guidance and peace of mind?

Answering a non-belligerent disbeliever who sneezes and praises God, one should say: "May Allah guide you and rectify your affairs," and not "May Allah have mercy on you." This is because the reward of the Hereafter is exclusive to believers, and one supplicates for their guidance. The Prophet, peace and blessings be upon him, used to say to the Jews when they sneezed: "May He guide you and rectify your affairs."