"The apostle [Muhammad] said, ‘Kill any Jew that falls into your power.' Thereupon Muhayyisa bin Masud leapt upon Ibn Sunayna, a Jewish merchant with whom they had social and business relations, and killed him. Huwayyisa was not a Muslim at the time though he was the elder brother. When Muhayyisa killed [the Jewish merchant], Huwayyisa began to beat [his brother Muhayyisa], saying, 'You enemy of God, did you kill him when much of the fat on your belly comes from his wealth?' Muhayyisa answered, 'Had the one who ordered me to kill him ordered me to kill you I would have cut your head off.'...[Huwayyisa] replied, 'By God, if Muhammad had ordered you to kill me would you have killed me?' [Muhayyisa] said, 'Yes, by God, had he ordered me to cut off your head I would have done so.' [Huwayyisa] exclaimed, "By God, a religion which can bring you to this is marvellous!' and [Huwayyisa] became a Muslim."To speed understanding of the above passage, I introduced into it specific names (in brackets), in place of some of the pronouns ("he," "him," etc.) that are in the original text.
Muhammad says, "kill any Jew who falls into your power."
He says it on page 369 (554 in the Arabic) of the earliest Muslim biography of Muhammad. It's a "beautiful" story of two brothers, Muhayyissa and Huwayyisa: (To avoid confusing the two brothers, keep in mind that the brother whose name begins with M is the Murderer in the story.)