This honorable Ayah abrogated the previous practice in the beginning of Islam, when the man had the right to take back his divorced wife even if he had divorced her a hundred times, as long as she was still in her `Iddah (waiting period). This situation was harmful for the wife, and this is why Allah made the divorce thrice, where the husband is allowed to take back his wife after the first and the second divorce (as long as she is still in her `Iddah). The divorce becomes irrevocable after the third divorce, as Allah said:
﴿الطَّلَـقُ مَرَّتَانِ فَإِمْسَاكٌ بِمَعْرُوفٍ أَوْ تَسْرِيحٌ بِإِحْسَـنٍ﴾
(The divorce is twice, after that, either you retain her on reasonable terms or release her with kindness.)
In his Sunan, Abu Dawud reported in Chapter: "Taking the Wife back after the third (Divorce) is an abrogated practice," that Ibn `Abbas commented on the Ayah:
﴿وَالْمُطَلَّقَـتُ يَتَرَبَّصْنَ بِأَنْفُسِهِنَّ ثَلَـثَةَ قُرُوءٍ وَلاَ يَحِلُّ لَهُنَّ أَن يَكْتُمْنَ مَا خَلَقَ اللَّهُ فِى أَرْحَامِهِنَّ﴾
(And divorced women shall wait (as regards their marriage) for three menstrual periods, and it is not lawful for them to conceal what Allah has created in their wombs,) (2:228) The man used to have the right to take back his wife even if he had divorced her thrice. Allah abrogated this and said:
(The divorce is twice.)
This Hadith was also collected by An-Nasa'i. Ibn Abu Hatim reported that `Urwah said that a man said to his wife, "I will neither divorce you nor take you back.'' She said, "How'' He said, "I will divorce you and when your term of `Iddah nears its end, I will take you back.'' She went to Allah's Messenger and told him what happened, and Allah revealed:
(The divorce is twice.)
Ibn Jarir (At-Tabari) also reported this Hadith in his Tafsir.
﴿فَإِمْسَاكٌ بِمَعْرُوفٍ أَوْ تَسْرِيحٌ بِإِحْسَـنٍ﴾
(...after that, either you retain her on reasonable terms or release her with kindness.) meaning, `If you divorce her once or twice, you have the choice to take her back, as long as she is still in her `Iddah, intending to be kind to her and to mend differences. Otherwise, await the end of her term of `Iddah, when the divorce becomes final, and let her go her own way in peace, without committing any harm or injustice against her.' `Ali bin Abu Talhah reported that Ibn `Abbas said, "When the man divorces his wife twice, let him fear Allah, regarding the third time. He should either keep her with him and treat her with kindness, or let her go her own way with kindness, without infringing upon any of her rights.''