The Jews used to claim that the blessings of the other world were specially reserved for them, and were not, meant for any other people. Certain other verses of the Holy Qur'an too refer to such a claim on the part of the Jews, and also of the Christians: قَالُوا لَن تَمَسَّنَا النَّارُ إِلَّا أَيَّامًا مَّعْدُودَةً : "They say: The, fire will not touch us but for a few days" (2:80), وَقَالُوا لَن يَدْخُلَ الْجَنَّةَ إِلَّا مَن كَانَ هُودًا أَوْ نَصَارَىٰ : And they say: No one will enter Paradise except he who is a Jew or Christian" (2:111), وَقَالَتِ الْيَهُودُ وَالنَّصَارَىٰ نَحْنُ أَبْنَاءُ اللَّـهِ وَأَحِبَّاؤُهُ :"And the Jews and the Christians said: We are the sons of Allah and His close friends" (5:18). What they meant in making such a claim was that since their own faith was the true one, they must certainly attain salvation in the other world -- the repentant and the forgiven being admitted to Paradise from the very beginning, the sinners finding release from the fires of Hell after undergoing a punishment for a few days, and the obedient receiving a welcome like sons and beloved friends.
The use of certain improper expressions like "sons of Allah" not-withstanding, these claims are in themselves quite correct, provided that they pertain to people who follow a true and valid faith. But the Jews (and the Christians as well) were still following a faith which had been abrogated, and was thus no longer valid -- a fact which nullified their claim. So, the Holy Qur'an has refuted the claim again and again in different ways, and the present verse has adopted a special mode. The habitual method of settling a dispute is to have a discussion and let both the parties present their own arguments. Since the Jews knew they could not win, they fought shy of this normal way. So, the Holy Qur'an suggests an abnormal method, which would not call for much knowledge or understanding, but only put a little strain on the tongue. The proposed trial consists in this -- if the Jews are so sure of the blessings of the other world being reserved for themselves, they should declare that they wish to die, and this declaration would establish them as being genuine in their faith; but if they refuse to accept the challenge, it would show that they were liars. The Holy Qur'an also predicts that they would never have the courage to go through the trial.
In view of their hostility to the Holy Prophet ﷺ ، one could expect them to take up such a simple challenge very zealously. But they knew very well in their heart of hearts that the Holy Prophet a and the Muslims stood for the truth, while they themselves were the champions of falsehood, and were, in actual fact, infidels. So, they refused to go through the trial, for they were struck with awe, and feared that as soon as they had expressed the wish to die, death would come over them, and they would be sent to Hell. This recalcitrance is, thus, in itself an evidence of the truth of Islam.
Here we must note that the trial was proposed not for all the Jews of all the ages, but specially for those who were the contemporaries of the Holy Prophet ﷺ ، and who used to deny him out of sheer envy and malice, in spite of having recognized that he was a genuine prophet.
Nor should one raise the doubt here that they had perhaps accepted the challenge, and "wished" for death in their hearts, as the Holy Qur'an seems to ask. For one, the Holy Qur'an itself reports the prediction that they would never "wish for it." Secondly, if they could wish for death in their hearts, they must have declared it orally too, for their victory lay in just such a declaration, and this was a very easy way of refuting the Holy Prophet ﷺ . But they did not avail themselves of this opportunity.
Nor can one suppose that they did make an oral declaration, for the fact has not been reported, and thus has not come down to us. Such a supposition would be wrong, because the opponents of Islam have always outnumbered its adherents, and if such a thing had happened, they must have been trumpeting it aloud to show to the world that the Jews had successfully passed the test proposed by the Holy Qur'an itself.