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Allah is a contraction of Al-Ilah, which was the name of the Arab moon god of Mohammed's day (hence the usage of the crescent moon as a symbol for Islam). Al-Ilah got shortened to Allah, and over time, became the only word used for their god. However, it remains true that this word pertains to the moon god, and thus, should not be used for the True and Living God of the Bible.
'Allah' is the Arabic word for God and as such is commonly used in the Arab world. There is another word that has a Persian origin but is also used for God, 'Khuda'. Christians in the Muslim world very often prefer to use 'Khuda' rather than 'Allah'. This is because to them 'Allah' is a false god, certainly not the Triune God of the Bible. 'Khuda' refers to the Supreme Deity and is used by Christians and Muslims alike.
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