"The Jews were military allies of the Muslims in some areas"
I really doubt this. The 'Israelites', as they were called, did not constitute a compact political entity in any part of the muslim world of the 11th century. But killing the whole population of a city after its defeat was very common. As there was no way to identify friend from foe, especially when they both spoke a same completely different unknown language.
But the fact that Jews were then living in 'relative' peace within moslem communities in the moslem world is very well known to the scholars. Look at
http://en.wikipedia.org/wiki/Maimonides
You might as well have a small idea of what was the intellectual mood in the 12th century.