The following is a chapter of Islam 101:
JIHAD LITERALLY translates as "struggle." Strictly speaking, jihad does not mean "holy war" as Muslim apologists often point out. However, the question remains as to what sort of "struggle" is meant: an inner, spiritual struggle against the passions, or an outward, physical struggle. (Read more detail about this important question here.)
As in any case of trying to determine Islamic teaching on a particular matter, one must look to the Quran and the Sunnah. From those sources it is evident that a Muslim is required to struggle against a variety of things: laziness in prayer, neglecting to give zakat (alms), etc.
But is it also plain that a Muslim is commanded to struggle in physical combat against the infidel as well. Muhammad's impressive military career attests to the central role that military action plays in Islam.
Muslim Scholar Hasan Al-Banna on jihad
Dar al-Islam and dar al-harb: the House of Islam and the House of War
Jihad Through History
Jihad in the Modern Era
See a Glossary Of Islamic Terms for definitions.
Islam 101 was written by Gregory M. Davis, author of Religion of Peace?: Islam's War Against the World, and the producer/director of Islam: What the West Needs to Know.