People of the Book absolutely applied to Jews. Ever heard of the Muslim prophets Noah, Moses, and Abraham? It is the main reason for them fleeing to Muslim countries during Christian persecutions of their communities. Second class, sure, but to say they were only mistreated is a blatant historical accuracy. Iran and Turkey are home to large Jewish communities to this day. Sephardic Jews, from Spain, were expelled by Catholics, after living for several hundred years under the Umayyad Caliphate.

Iran's issue is with the existence of a Jewish state. Not the existence of Jews in the world.

Please educate yourself before acting like you know better. A basic Google search can literally disprove much of what you claim.