“He Will Break the Rebellious Nations in pieces”

when it says God will rule with an iron rod and smash the nations? Is it speaking about believers or unbelievers?
In Revelation 2 we read this:
Rev. 2:27 and he shall rule them with a rod of iron, as the vessels of the potter are broken to pieces, as I also have received authority from My Father;

This passage is a quote from Psalm 2:9. To understand the meaning of this quote, we must visit the context of the entire passage in the Old Testament:
Psa. 2:1 Why are the nations in an uproar
And the peoples devising a vain thing?
Psa. 2:2 The kings of the earth take their stand
And the rulers take counsel together
Against the Lord and against His Anointed, saying,
Psa. 2:3 “Let us tear their fetters apart
And cast away their cords from us!”
Psa. 2:4 He who sits in the heavens laughs,
The Lord scoffs at them.
Psa. 2:5 Then He will speak to them in His anger
And terrify them in His fury, saying,
Psa. 2:6 “But as for Me, I have installed My King
Upon Zion, My holy mountain.”
Psa. 2:7 “I will surely tell of the decree of the Lord:
He said to Me, ‘You are My Son,
Today I have begotten You.
Psa. 2:8 ‘Ask of Me, and I will surely give the nations as Your inheritance,
And the very ends of the earth as Your possession.
Psa. 2:9 ‘You shall break them with a rod of iron,
You shall shatter them like earthenware.’”

From this context, we can find numerous details that reveal the time and circumstances the Psalmist is describing. First, all the nations of the Earth are in an “uproar.” They are conspiring in vanity to challenge the authority of God Himself. The kings of the earth are working together against the Messiah, the Anointed of God. They desire to rob Him of His power to rule over them.
Obviously, these are not believers. They are set against the Lord’s authority, and their prideful, sinful hearts are seeking to rebel. Meanwhile, the Lord is scoffing at their pathetic plans to defeat His power on earth. The Lord promises to speak to them in anger and in fury, denying them a victory and installing the Messiah as King of the Earth in Jerusalem on His holy mountain.
The Lord promises to make His Son the King and grant to Him an inheritance to the ends of the earth. All the Earth will become Christ’s possession, which He will rule with absolute authority. He will break rebellion and shatter the strength of those sinful nations wishing to challenge His authority. We know these things are fulfilled in the Second Coming of the Lord, when He sets up His Kingdom on earth.
Therefore, the phrase quoted in Revelation 2 from Psalm 2 is a reference to Christ ruling over the nations of the earth during the Millennial Kingdom. That rule will be over all natural men living in the Kingdom, both unbelievers and believers. On the other hand, it does not apply to the glorified saints who have received new, eternal bodies at the resurrection.
Turning back to Revelation 2, we see how Jesus applied this truth from Psalm 2 to the church:
Rev. 2:26 ‘He who overcomes, and he who keeps My deeds until the end, to him I will give authority over the nations;
Rev. 2:27 and he shall rule them with a rod of iron, as the vessels of the potter are broken to pieces, as I also have received authority from My Father;
Rev. 2:28 and I will give him the morning star.

Jesus promises that to the one who overcomes (i.e., who comes to saving faith in Jesus…see 1John 5:4), Jesus will grant authority over the nations of the Kingdom. Once again, these are the nations of the world who populate the Kingdom on earth. These nations will include natural men, both believers and unbelievers, who requiring ruling because they occupy fallen bodies still prone to sin. As Jesus rules with authority over the nations, He grants resurrected saints the opportunity to rule over the nations with Him according to Revelation 20:4.

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