Abbas - Tanwîr al-Miqbâs min Tafsîr Ibn ‘Abbâs
Then He also mentioned His blessings upon the Children of Israel, saying: (O Children of Israel!), O Children of Jacob! (Remember My favour), recollect my blessings (wherewith I favoured you) with the scripture, the Messenger and Islam (and how I preferred you to the worlds) sought you in preference to the other peoples of your time.
[O Children of Israel, remember My favour wherewith I favoured you, and that I have preferred you above all the worlds]
The address is repeated in order to communicate that the One who guided them first and was gentle to them and favoured them over the two veiled worlds of their time by guiding them to the lifting of the first veil, is One who guides them a second time. So just as He did not desire any evil for them at the time of the first guidance, likewise at the time of the second guidance He only desires good for them;
Reminding the Children of Israel that They were preferred above the Other Nations
Allah reminds the Children of Israel of the favors that He granted their fathers and grandfathers, how He showed preference to them by sending them Messengers from among them and revealing Books to them, more so than any of the other previous nations. Similarly, Allah said,
(And (remember) when Musa (Moses) said to his people: "O my people! Remember the favor of Allah to you: when He made Prophets among you, made you kings, honored you above the `Alamin (nations).'') (5:20).
Abu Ja`far Ar-Razi reported that Ar-Rabi` bin Anas said that Abu Al-`Aliyah said that Allah's statement,
وَأَنِّى فَضَّلْتُكُمْ عَلَى الْعَـلَمِينَ
(and that I preferred you over the `Alamin) means, "The kingship, Messengers and Books that were granted to them, instead of granting such to the other kingdoms that existed during their time, for every period there is a nation.'' It was also reported that Mujahid, Ar-Rabi` bin Anas, Qatadah and Isma`il bin Abi Khalid said similarly.
The Ummah of Muhammad is Better than the Children of Israel
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,
كُنتُمْ خَيْرَ أُمَّةٍ أُخْرِجَتْ لِلنَّاسِ
(You are the best of peoples ever raised up for mankind) (3:110).
Maududi - Sayyid Abul Ala Maududi - Tafhim al-Qur'an
It refers to the period when the Israelites were the only people in the world who possessed the knowledge of the Truth from Allah and were, therefore, made leaders of the people of the world and were required to invite all other nations to His submission and to guide them on the Right Way.
In this verse the Israelites have been warned to guard against their wrong notion about the Hereafter, for this was the main cause of their degeneration. They were under the delusion that they would win salvation just because they were the descendants of great Prophets and had relations with great saints and pious and righteous people. That is why they neglected we religion and involved themselves in sin. Here they are being disillusioned and warned that they will not escape the consequences of their evil deeds by virtue of their relation with some holy person or his intercession in their behalf. That is why immediately after reminding them of the favour (v. 47) they have been warned that they shall be punished like the guilty people who lived in this world without belief in the Hereafter.
children of Israel remember My favor wherewith I favored you and that I have preferred you above all the worlds; He called the children of Israel to bear witness to the favor or bounty faḌl granted to them saying “and that I have preferred you faḌḌaltukum above all the worlds.” He called the Muslims from the community of Muḥammad ﷺ to bear witness to the favor or bounty of God Himself saying “Say: 'In the bounty of God and in His mercy in that let them rejoice'” [10:58]. What a difference between those who bear witness to the favor or bounty they receive and those who bear witness to the bounty of their Lord Himself! The servant's acknowledgment of the favor granted him implies gratitude but with the danger of self-conceit iʿjāb. But the servant's acknowledgment of the bounty of the Real-the One whose majesty is in His description and His beauty in the worthiness of His attribute-involves praise which leads to [God's] approval ījāb.