Extract from Islam 101
The following is taken from the Islam 101 course
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.
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 (see above) 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.