The Christians of Najrán sent a deputation to the Holy Prophet (S) in Madina to argue about their faith. They maintained that Prophet `Ísá (A) was the son of Alláh. The Holy Prophet (S) tried to prove to them that Prophet `Ísá (A) was a human being, specially chosen as a Prophet by Alláh, but they remained obstinate in their belief. At this time, the following verse was revealed:
Verily, the likeness of `Ísá with Alláh is as the likeness of Ádam,
He created him out of dust, then He said to him, "Be!" and he was.
(This is) the truth from your Lord, therefore do not be of those who doubt. (Áli `Imrán, 3:59,60)
The Holy Prophet (S) used this verse to argue that if the Christians said that `Ísá (A) was the son of Alláh because he was born without a father, then what about Ádam (A) who did not even have a mother? In this verse Alláh also reminds us of His Power; all He does when He wills something to happen is to say "Be!" and it becomes.
Despite this, the Christians continued to argue and then the verse of Mubáhila was revealed as below.
But whoever disputes with you (O Muhammad) in this matter after the knowledge has come to you,
then say, "Come, let us call our sons and your sons,
and our women and your women, and our selves and your selves,
then let us humbly pray to Alláh and invoke His curse upon the liars."
Verily, this is the true narrative. There is no god except Alláh,
and verily, Alláh is the Almighty, All-wise.
But if they turn away, then, verily, Alláh knows the mischief-makers. (Áli `Imrán, 3:61-63)
According to Alláh’s command, the Holy Prophet (S) challenged the Christians to pray and invoke Alláh’s curse on the party that insisted upon falsehood. They accepted the challenge and on the next day (24th Zul Hijjah), the Holy Prophet (S) came out to the meeting place carrying Imám Husain (A) in his arms and leading Imám Hasan (A) by his hand. He was followed by Bibi Fátimah (A) and at the end was Imám `Alí (A) carrying the banner of Islám. He had brought his grandsons as his "sons" and Bibi Fátimah (A) as his "women" and Imám `Alí (A) as his "soul" or "self" Seeing that the Holy Prophet (S) was accompanied by his immediate family and convinced that he was truthful, the Christians backed away from the confrontation and agreed to pay tax to the Muslim state instead.
References
Holy Qur’án, Tafsír of S V Mir Ahmed Ali
Ahlul Bait; Their Status, Manner and Course, Al-Balagh Foundation