The Ummah of Muhammad is Better than the Children of Israel-I [2:47]

This is the only way the Ayah can be understood, because this Ummah is better than theirs,

 as Allah said;

(You are the best of people ever raised up for mankind; you enjoin good and forbid evil, and you believe in Allah. And had the People of the Book (Jews and Christians) believed, it would have been better for them) (3:110).

Also, the Musnad and Sunan Collections of Hadith recorded that Mu`awiyah bin Haydah Al-Qushayri said that the Messenger of Allah said,

(You (Muslims) are the seventieth nation, but you are the best and most honored of them according to Allah.)

There are many Hadiths on this subject, and they will be mentioned when we discuss Allah's statement,

(You are the best of peoples ever raised up for mankind) (3:110).