Daru is French and Algerian born. He knows of the French-Algerian conflict and that it is the result of French colonialism in Algeria. Darus is like one of Camus' existential characters and he recognizes the French/Arab conflict as a fight over land and people. One of the first reasons he gives for refusing to take the Arab to Tinguit is that he, a schoolteacher, has no place fighting or escorting a prisoner of war.
"The orders? I'm not . . ." Daru hesitated, not wanting to hurt the old Corsican. "I mean, that's not my job."
Daru does not want to partake in this war/culture clash, so he then asks what the Arab (still referred to by that nameless moniker "the Arab" - by the narrator) has done. Balducci replies that he's killed his cousin. Balducci is not even sure if this Arab man is against him or on their side. This makes Daru even more uncomfortable with taking the Arab as prisoner and shows how absurd Daru thinks Balducci's reasoning...
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