Fadak was a fertile tract in the vicinity of Khaibar under the Jewish occupation, just three miles from Medina, now the modern village of Howeyat. After the victory of Khaibar, Prophet Muhammad thought to destroy the strength of the Jews of this area, who were threat to Islam, therefore, he sent his envoy, Muhit to Yusha bin Nun, the chief of the village Fadak. The chief of the Jews preferred peace and surrendered to fighting. A peace treaty was concluded between Muhammad and the local Jews on the terms that 50% yield of Fadak would be surrendered to Muhammad each year by the Jews. It was a gift, and not a booty of war, and according to Islam, the areas which are conquered through wars are the property of all the Muslims, and the lands which fall into the hands of the Muslims without any military operation pertain to the personal property. When the Koranic verse: "Give the kinsman his due, and the needy, and the wayfarer...." (17:26) was revealed, Muhammad called his daughter and made over Fadak to her. Suyuti writes in "Dhurr'i Manthur" (4th vol., p. 176) that, "Muhammad had bequeathed the ownership of the property of Fadak to his daughter, Fatima, and also executed a deed of gift in her favour, and her two sons."
When Abu Bakr assumed the caliphate, he forfeited Fadak from Fatima. When she was informed of the usurpation of Fadak, she appeared before him and produced a legal deed of trust, and also produced the witnesses of Ali and Umm Aiman, which were totally disapproved by Abu Bakr. The confiscation of Fadak was perhaps one of the burning issues between the Shiites and Sunnites. The Umayyad caliph Umar bin Abdul Aziz, the Marcus Aureiius of the Arabs, a virtuous ruler and a God-fearing Muslim, finally handed over the property of Fadak to Muhammad al-Bakir as the sole heir of Fatima.