Rashi on Deuteronomy 7:2/רש"י על דברים ז׳:ב׳

1ולא תחנם means, THOU SHALT NOT ASCRIBE GRACE (חן) TO THEM: it is forbidden to a person to say “How beautiful is this heathen”. Another explanation: thou shalt not grant them a חניה, an encampment (a settlement) in the land (Avodah Zarah 20a).