Jews, the Chosen People?

Question: .. and Jacob was of the people the Lord chose for himself...it then goes on to say that he treated Jacob better than anyone else....huh?Why would God do that? I'm not certain what the interpretation of this scripture is supposed to be, but as it reads, it doesn't sound very good to me....

Answer: That the Jews were the chosen people is in our scriptures as well. The explanation is that when a Prophet is sent to a people with divine message, they are indeed blessed to have received it and thus, they are bound to honour the covenant they make with God. Since after Prophet Abraham, all Prophets were from his progeny, and the Jews or Bani Israel are the family of Jacob, they were the chosen people and that carried with it great responsibility.
We are reminded over and over again in the Quran that the Bani Israel were blessed above all the nations, yet they disobeyed and thus have lost that privileged status. Now, the message has been sent to Bani Ishmael (Ishmael was the other son of Abraham) through his progeny Muhammad, and thus we should forever be careful not to make the mistakes that the Jews did, and if we do, then we should also be prepared to suffer a similar fate.
The Holy Quran, Chapter 5
Verse 12: Allah made a covenant of old with the Children of Israel and We raised among them twelve chieftains, and Allah said: Lo! I am with you. If ye establish worship and pay the poor-due, and believe in My messengers and support them, and lend unto Allah a kindly loan, surely I shall remit yoursins, and surely I shall bring you into Gardens underneath which rivers flow. Whoso among you disbelieveth after this will go astray from a plain road.
Verse 13: And because of their breaking their covenant, We have cursed them and made hard their hearts. They change words from their context and forget a part of that whereof they were admonished. Thou wilt not cease to discover treachery from all save a few of them. But bear with them and pardon them.Lo! Allah loveth the kindly.
Verse 14: And with those who say: "Lo! we are Christians," We made a covenant, but they forgot a part of that whereof they were admonished.Therefore We have stirred up enmity and hatred among them till the Day of Resurrection, when Allah will inform them of their handiwork.
Verse 15: O People of the Scripture! Now hath Our messenger come unto you, expounding unto you much of that which ye used to hide in the Scripture, and forgiving much. now hath come unto you light from Allah and plain Scripture,Verse 16: Whereby Allah guideth him who seeketh His good pleasure unto paths of peace. He bringeth them out of darkness unto light by His decree, and guideth them unto a straight path.http://searchtruth.com/chapter_display_all.php?chapter=5

Follow up question: I have throughout my life had an issue with how Abraham set Hagar and Ishmael off as if they were not important. This story will forever remain unsettling to me.

Answer: Why Prophet Abraham had to send Hagar and Ishmael off, I do not know for sure…. The only thing I do know is that he was a very good person and a prophet, and thus there must have been some compulsion, some unavoidable circumstances, that led to such an event. There are all sorts of stories, from the Jewish as well as Islamic sources, but yes, they just don’t seem to match up with the character of a prophet, a man of God…..but then these are history recorded by men, and as such not to be blindly relied upon.