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The epigraph from this passage is from William Shakespeare's play The Merchant of Venice. Scott quotes this same section in his "Dedicatory Epistle," so it must be really important to him.
It's from a super-famous speech by Shylock, the Jewish main character, who demands to know why Jews should be treated any differently from Christians when they are all human beings.
By quoting these lines, Scott informs his readers that a major theme of Ivanhoe will be anti-Semitism, or prejudice against Jewish people.
Oswald the steward tells Cedric that the guest at the door is a Jewish man named Isaac of York.
Wamba, Prior Aymer, and Bois-Guilbert all protest the idea of sharing a table with a Jewish man, but Cedric insists that it's the duty of a host to welcome anyone who comes to the door, regardless of faith. After all, Cedric adds, they're sharing a table with the Normans' two Muslim servants from the Crusades.
Isaac approaches the table humbly.
Cedric indicates that he should sit down in the lower part of the hall, but no one seated there will make room for him.
Isaac wanders the length of the table looking for a place to sit.
Finally the man who guided the Normans to Cedric's house offers his seat at a small table to Isaac.
The Palmer brings Isaac some food off the roasting spit and then approaches the upper table.
Isaac starts eating as though he hasn't had food in ages.
Prior Aymer and Cedric are deep in conversation about hunting.
Bois-Guilbert pipes up that French is the true language, not just for hunting but also for love and war.
Cedric exclaims that Saxons do as well in battle as any Norman.
Bois-Guilbert insists that the true fame of the Crusades belongs to the Knights Templar and to the Hospitallers (the European forces sponsored by the Catholic Church).
Rowena asks if there are no knights among the English armies who can equal the Knights Templar and the Hospitallers.
The Palmer announces that the English knights are the best among the Christian armies in the Holy Land. He witnessed with his own two eyes a tournament at Acre (in modern-day Israel). There, Richard and five of his knights held their own against all comers, including seven members of the Knights Templar.
When Cedric asks the names of these brave Englishmen, the Palmer lists off all of them but one. He remains mysterious on the subject of this sixth, lower-ranking man.
Bois-Guilbert announces that this sixth man is none other than the Knight of Ivanhoe.
Bois-Guilbert demands that Ivanhoe meet him in a week's time at the local tournament for a rematch so that he can prove he is the better man. The Palmer agrees and offers up an extremely valuable holy relic as a pledge that the Knight of Ivanhoe will fight in a week as promised.
Prior Aymer suggests that they finish up this round of drinks and go to sleep.
As they are leaving the hall, Bois-Guilbert asks Isaac rudely if he's going to the tournament.
Bois-Guilbert assumes that Isaac is there to cheat and steal money from Christians.