"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, the Prophet wiped out the Jewish influence in 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 the Prophet and the local Jews on the terms that 50% yield of Fadak would be surrendered to the Prophet 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, the Prophet summoned his daughter and handed over Fadak to her. Suyuti writes in Dhur-e-Manthur (4:176) that, "The Prophet 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. 

Later, when the Jews of Fadak were encircled by the forces of Umar, he assigned Fadak to al-Abbas and Ali as administrators. It was Muawiya who brought it under private ownership by giving it as iqta (fiefdom) to Marwan bin Hakam. Thus, the confiscation of Fadak was perhaps one of the burning issues between the early Shi'ites and Sunnites.

The Umayyad caliph Umar bin Abdul Aziz finally handed over the property of Fadak to Imam Muhammad al-Bakir as the sole heir of Fatima. Summing up the issue of Fadak, Imam Muhammad al-Bakir said, "Verily, Fadak was among the things which God bestowed as a fay on His Apostle without his having fought for it. Thus, when God revealed (the Koranic verse) so give to the kinsman his due, the Prophet made a gift of Fadak to Fatima. When the Prophet died, Abu Bakr took it away from her. When Uthman became ruler, he gave it away as a fief to Marwan (bin Hakam). Then, when Marwan assumed power, he gave two-thirds of it to his son Abdul Malik and one-third to his son Suleman. When Abdul Malik assumed power, he gave two-thirds to Abdul Aziz and one-third remained with Suleman. When Suleman came to rule, he gave his one-third to Umar bin Abdul Aziz. When Umar bin Abdul Aziz assumed power, he returned the whole of Fadak to the sons of Fatima" (Daim al-Islam, 1:475-6)