Why is the Prophet’s grave in his mosque even though it is forbidden to take graves as places of worship?

The scholars have
discussed this issue, in the past and more recently, and they refuted
those who quote the fact that the grave of the Prophet (peace and
blessings of Allaah be upon him) is inside his mosque as evidence that it
is permissible to take graves as places of worship, or to include graves
in mosques. We will quote the fatwas of some of our prominent scholars,
which discuss in detail the matter raised in the question. 

1 – Shaykh ‘Abd al-‘Azeez ibn Baaz (may Allaah have mercy on
him) said: 

There is a specious argument put forward by those who worship
graves, namely the fact that the grave of the Prophet (peace and
blessings of Allaah be upon him) is in his mosque. The answer to that is
that the Sahaabah (may Allaah be pleased with them) did not bury him in his
mosque, rather they buried him in the house of ‘Aa’ishah (may Allaah be
pleased with her). When al-Waleed ibn ‘Abd al-Malik expanded the Mosque of
the Prophet (peace and blessings of Allaah be upon him) at the end of
the first century, he incorporated the room into the mosque, but he did
wrong thereby, and some of the scholars denounced him for that, but he
believed that there was nothing wrong with it for the sake of expanding the
mosque. 

It is not permissible for a Muslim to take that as evidence
that mosques may be built over graves, or that people may be buried inside
mosques, because that goes against the saheeh ahaadeeth, and because it is a
means that may lead to shirk by associating the occupants of the graves in
worship with Allaah.  End quote. 

Majmoo’ Fataawa al-Shaykh Ibn Baaz,
5/388, 389. 

2 – Shaykh Muhammad ibn Saalih al-‘Uthaymeen (may Allaah have
mercy on him) was asked about the ruling on praying in a mosque in which
there is a grave. 

He replied: 

Praying in a mosque in which there is a grave falls into two
categories: 

(i)Either the grave was there
before the mosque, and the mosque was built over the grave. It is essential
to shun this mosque and not pray therein, and the one who built it must
knock it down; if he does not do so, then the Muslim authorities must knock
it down.

(ii)Or the mosque was there before
the grave, and the deceased was buried after the mosque was built. In the
case the grave must be dug up, and the remains taken out and buried with the
people (in the graveyard).

As for praying in such a mosque, it is permissible so long as
the grave is not in front of the worshipper, because the Prophet (peace
and blessings of Allaah be upon him) forbade praying in the direction of
graves. 

With regard to the grave of the Prophet (peace and
blessings of Allaah be upon him) which is incorporated into his mosque, it
is well known that the Mosque of the Prophet (peace and blessings of
Allaah be upon him) was built before his death, and was not built over his
grave. It is also well known that the Prophet (peace and blessings of
Allaah be upon him) was not buried in the mosque, rather he was buried in
his house which was separate from the mosque. At the time of al-Waleed ibn
‘Abd al-Malik he wrote to his governor in Madeenah, who was ‘Umar ibn ‘Abd
al-‘Azeez, in 88 AH, ordering him to dismantle the Prophet’s Mosque and add
to it the rooms of the wives of the Prophet (peace and blessings of
Allaah be upon him). ‘Umar gathered the prominent people and fuqaha’, and
read the letter of the caliph al-Waleed to them. That caused them distress,
and they said: “Leave it as it is, that is better.” And it was narrated that
Sa’eed ibn al-Musayyib denounced the incorporation of ‘Aa’ishah’s room into
the mosque, as if he feared that the grave would be taken as a place of
worship. 

Umar wrote a letter to that effect to al-Waleed, and
al-Waleed sent word to him ordering him to carry out his instructions, so
‘Umar had no other choice.  So you see that the grave of the Prophet
(peace and blessings of Allaah be upon him) was not placed in the mosque,
and the mosque was not built over it, so there are no grounds for those who
try to quote this as evidence that people may be buried inside mosques or
that mosques may be built over graves.

It is proven that the Prophet (peace and blessings of
Allaah be upon him) said: “May the curse of Allaah be upon the Jews and the
Christians; they have taken the graves of their Prophets as places of
worship.” He said that as he was dying, as a warning to his ummah against
doing what they did. When Umm Salamah told him of a church that she had seen
in Ethiopia and the images therein, he said: “Those people, if a righteous
man among them died, they would build a place of worship over his grave.
They are the most evil of people before Allaah.” And it was narrated from
Ibn Mas’ood (may Allaah be pleased with him) that the Prophet (peace
and blessings of Allaah be upon him) said: “Among the most evil of people
upon whom the Hour will come when they are still alive are those who take
graves as places of worship.” Narrated by Imam Ahmad with a jayyid isnaad. 

The believer should not accept to follow the ways of the Jews
and the Christians, or to be among the most evil of people. 

Majmoo’ Fataawa al-Shaykh Ibn ‘Uthaymeen,
12/question no. 292 

And Allaah knows best.