I wasn't surprised by this question at all! After the tragic 9/11 attack of al-Qaeda on America and the war in Afghanistan, many students associate Muslims with terrorists.
I told my student and then later on, I repeated the same answer to the whole class: The Qur'an condemns terrorism! I told them that "Jihad" has several meanings: one of these, combative jihad, is justified only in self-defense and never as vengeance toward non-Muslims.
The Qur'an condemns religious extremism and calls on Muslims to be responsible citizens and co-exist peacefully with people of other faiths.
Terrorists have never read the Qur'an themselves! They have only listened to an interpretation of the Qur'an!
I always tell my students that we live in an interdependent and interconnected world, where peaceful and interfaith and intra-faith dialogue, is imperative.
Terrorism is a terrible injustice because it targets innocent people! Muslims are bound by the Qur'anic prohibitions of taking an innocent life (Qur'an: 5:32; 17:33), considered as one of the gravest sins in Islam. Furthermore, the Qur'an clearly demands that Muslims act justly and impartially, even when dealing with an enemy (4:135, 5:8).
No verse in the Qur'an, when placed in its proper textual and historical context, permits fighting others on the basis of their faith, ethnicity, or nationality.
"Islam is not the problem," Reuven Firestone , a rabbi and scholar writes. "Terrorism is the problem, and terrorists have hijacked both Islam and God."