Do the Prophetic Hadiths: "I am free of him who lives among their midst" and "The Muslim and the disbeliever—their fires should not be visible to one another," apply to the lands of the People of the Book, or only to atheist countries? And does this include lands of the People of the Book that have cities designated for Muslims where they can practice their religion without harassment?

The ruling on residing in non-Muslim lands depends on the Muslim's ability to perform his rituals and his safety from being influenced by falsehood. If he fears for his religion, emigration becomes obligatory upon him. If he is able to preserve his religion and call to Allah, there is no harm in him remaining. As for cities specifically for Muslims, they are considered Dar al-Islam (Abode of Islam) if they are independent therein and safe from the entry of disbelievers with their immorality; otherwise, they become like other cities.