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Anas Ibn-i Malik, may Allah be pleased with him, narrates:

At the time of Jahiliyya (the time of ignorance before Islam was realized; describes polytheistic religions) there were two days in every year when the community would make celebrations. When he came to Madinah, Allah's Messenger, peace and blessings upon him) said:

You too have two days for celebration. Allah granted you the better, instead of those days at the time of ignorance. They (the better ones) are the days of the festivals of Ramadan and Sacrifice. (Nasai, 'Iydayn: 1)

The significance of the Festivals of Ramadan and Sacrifice stem from their relation to fasting and Hajj (pilgrimage), which are two fundamental types of worship of Islam.

The Ramadan Festival is the joy of thanks offered for the worship of fasting. And the Festival of Sacrifice is the joy felt because of the worship of sacrifice and Hajj.

The Festival of Ramadan refers to the accomplishment of the test of patience shown for such a difficult worship as fasting, which lasts for a month.

Believers, who restrain themselves for a month from eating, drinking, and sexual relation for Allah's acceptance, deserve such a festival. In this respect, the Festival of Ramadan is an iftar (meal eaten to break fasting at sunset) of all the fasting of Ramadan. It is for this reason that this festival is also called “the Festival of Fitr (alms special for this month)”.

Those who complete their fasting without flaw feel joy with iftar every day; similarly, those who complete their fasting for one month feel joy with the festival, which constitute one of the most meaningful aspects of the Festival of Ramadan.

Every year, we feel the happiness of celebrating those two festivals. We try to increase our thanks to Allah more and more.

As is narrated by Anas Ibn-i Malik, may Allah be pleased with him, Allah's Messenger (PBUH) would not go to the Prayer of Festival on the day of Ramadan Festival without first eating some dates. (Bukhari, 'Iydayn: 4)

Jabir Ibn-i Abdullah, may Allah be pleased with him, describes the Prophet's Prayer of Festival:

On the day of festival, I was present at the prayer with Allah's Messenger (PBUH). He started praying (salah) before preaching and before reciting adhan (call to prayer) and iqama (similar to adhan; recited before praying). And then, standing and leaning to Bilal, he advised acting with taqwa (righteousness; goodness; piety) towards Allah. Encouraging obedience to Allah, he preached and advised people. And then he walked; when he came to the side where women were present, he preached and advised them. (Muslim, Salatu’l-'Iydayn: 4)

One of the points that the Prophet emphasized was to give alms after the Prayer of Festival. The translation of the hadith (saying of the Prophet) about the topic is as follows:

Ibn-i Abbas, may Allah be pleased with them both, explains:

I was present at the Prayer of Ramadan Festival together with Allah's Messenger (PBUH), Abu Bakr, Umar and Uthman. All of them would lead the prayer before the sermon and then deliver the sermon.

Once, I saw Allah's Messenger (PBUH) climb down the minbar (a raised pulpit in the mosque where the Imam stands to deliver sermons) after the sermon, and make the sign for the congregation not to dismiss but to sit down.

Then, passing through the lines of men with Bilal, he came to the place where women were present. Allah's Messenger (PBUH) recited the following verse from the Qur'an:

“O Prophet! When the believing women (who have professed Islam) come to you to swear allegiance to you – that they will never associate partners with God in any way, and will not steal, and will not commit any illegal sexual intercourse, and will not kill their children, and will not indulge in slander (such as attributing any of their children to other than their own father) that they have willfully devised, and that they will not disobey you in anything that is proper-then accept their allegiance and ask God for their forgiveness. Surely God is All-Forgiving, All-Compassionate.” The Qur'an, Al-Mumtahana (The Examined One) 60: 12

And then, he asked the women:

“Are you firm on this covenant?”

One of the women whom they did not recognize said:

“Yes, O Allah's Messenger!”

Others did not answer. Thereupon, Allah's Messenger (PBUH) said: “Then give alms!”

Spreading his garment, Bilal said: “Let my father and mother be sacrificed for you (an expression that the companions used to show their love to the Prophet)! Come and give (alms)!”

And they started to cast their necklaces and rings into Bilal's garment.” (Muslim, Salatu’l-'Iydayn: 1)

On the days of festivals, merry-making and playing games are also permitted provided that they are legitimate. Aisha, may Allah be pleased with her, relates the permission of the Prophet about it as follows:

Allah's Messenger (PBUH) came to my house while two girls were singing beside me the songs of Buath (a story about the war between the two tribes of the Ansar, the Khazraj and the Aus, before Islam). The Prophet (PBUH) lay down and turned his face to the other side. Then Abu Bakr came and spoke to me harshly saying, "Musical instruments of Satan near the Prophet (PBUH)?" Allah's Messenger (PBUH) turned his face towards him and said, "Leave them." When Abu Bakr became inattentive, I signaled to those girls to go out and they left.

According to the narration of Bukhari, after saying, “Leave them”, Prophet Muhammad (PBUH) added: “There is an 'eid (festival) for every nation and this is our 'eid.” or “These days are the days of festival.” (Muslim, Iydayn: 16-22, Bukhari, Iydayn: 25)

At the Era of Bliss (the time of the Prophet), there were plays of spear and dances based on national tradition which resemble today's folklore. They were generally played by the Ethiopians (Abyssinians). In the books of hadith such as Bukhari and Muslim, there are some narrations about the subject reported from Aisha, may Allah be pleased with her:

On one of the festival days, while the Ethiopians were playing with shields and spears and were dancing, Allah's Messenger (PBUH) saw them and let Aisha watch that play.

Aisha, may Allah be pleased with her, explains the event as follows:

“When the Abyssinians came and started dancing, Allah's Messenger (PBUH) called for me. And I went and put my head on his shoulder. I started watching the play of the Abyssinians. Finally, I was the first to give up watching them.”

Moreover, in such a play, Allah's Messenger (PBUH) even encouraged the Abyssinians saying: “"Come on! O Bani Arfida (sons of Arfida)! Play!"

Furthermore, Allah's Messenger (PBUH) calmed Umar bin Khattab down, who, when he saw such a group, wanted to prevent them by stoning; the Prophet said:

“Leave them, O Umar!” (Muslim, 'Iydayn: 18-22)