I recently bought a print of this engraving , and was surprised to find that there's a bit of a mystery concerning what and who is actually being portrayed. Muhammed (sleeping, lower left) and Sergius/Bahira (dead, lower right) aren't controversial, but the third figure (standing, with sword) is unknown. According to most of the sources I found, the image shows Muhammad being framed for the murder of his teacher and mentor. After reading through the history of Medieval and Renaissance views of Islam, it seems that there were several popular myths that tried to rationalize Islam as a heretical sect that had been led astray, either by Sergius mistaking Muhammad for a true prophet, or by Muhammed misinterpreting Sergius' teachings after the monks death.
Who is the third party? Where would the idea of this sort of "frame-up" have come from? This image seems far more sympathetic to both Mohammad and Sergius than the written accounts, which doesn't seem to make a lot of sense.
As it turns out, this story is fact comes from the Travels of Sir John Mandeville, where it is presented as an explanation for the muslim ban on drinking:
And also Mahomet loved well a good hermit that dwelled in the deserts a mile from Mount Sinai, in the way that men go from Arabia toward Chaldea and toward Ind, one day’s journey from the sea, where the merchants of Venice come often for merchandise. And so often went Mahomet to this hermit, that all his men were wroth; for he would gladly hear this hermit preach and make his men wake all night. And therefore his men thought to put the hermit to death. And so it befell upon a night, that Mahomet was drunken of good wine, and he fell on sleep. And his men took Mahomet’s sword out of his sheath, whiles he slept, and therewith they slew this hermit, and put his sword all bloody in his sheath again. And at morrow, when he found the hermit dead, he was full sorry and wroth, and would have done his men to death. But they all, with one accord, said that he himself had slain him, when he was drunken, and shewed him his sword all bloody. And he trowed that they had said sooth. And then he cursed the wine and all those that drink it. And therefore Saracens that be devout drink never no wine. But some drink it privily; for if they drunk it openly, they should be reproved. But they drink good beverage and sweet and nourishing that is made of gallamelle and that is that men make sugar of, that is of right good savour, and it is good for the breast.
The Travels are a late medieval compilation of accounts of a wide range of foreign lands, of widely varying degrees of veracity, and stayed in great popularity for quite some time; it is by no mean surprising that an artist like Lucas van Leyden would turn to it for exotic subject-matter. This account explains the third person quite well; it is the man who is framing Muhammed by putting a sword in his hands.And of course this image could itself fit into a polemical attitude towards Islam; in many accounts after all Sergius/Bahira was a Nestorian, and therefore heretical, monk(not a historically implausible affair given the substantial Syriac christian presence in late antique Arabia, which probably included both East and West Syrians, even if the actual account is a grossly propagandistic fiction in all liklihood). One could also argue I think that Muhammed's posture in this engraving alludes very subtly to the common posture of the sleeping soldier in paintings of the Resurrection but that might be going a bit far.