>> Quran permit others to follow their own >>religion.
This is correct. Islam says there is no compulsion in Religion. The ultimate aim is to prtect one from the punishment in the world here after.
>>If that is so then why did prophet Mohammed >>kill the arabs who worshipped idols.Is that >>not contradictory?
This is not correct if you read the history. They where taken to war to protect themself. This is logical. Think we as a nation, if somebody attack us and kill our people are we supposed to sit not preventing them or attack them. THis was the same situation of muslims in thoses years.