What to know
Your friend is referring to Sura 4:157 in the Qur’an: "And [for] their saying, 'Indeed, we have killed the Messiah, Jesus, the son of Mary, the messenger of Allah.' And they did not kill him, nor did they crucify him; but [another] was made to resemble him to them. And indeed, those who differ over it are in doubt about it. They have no knowledge of it except the following of assumption. And they did not kill him, for certain."
For many Muslims, this ayah (verse) is enough to mean that the Gospel is false. However, more than that, he or she also believes that because Allah claims to have saved Jesus from a humiliating death on the cross, Jesus is thereby shown greater honor in Islam.
What to say
Consider one or several of these responses. Note that this is a basic framework for you to build on; this isn't a template to copy and paste.
Ask: "Which is a greater display of God’s power – making it look like Jesus was killed, or raising him from the dead?" The holy Bible says that God was glorified by the resurrection of Jesus, and that his death accomplished a purpose. Mankind might have thought they “won” that day, but this happened according to the power, purpose, and wisdom of God. He orchestrated human decisions and actions to accomplish his plan of redemption, so that it was accomplished through our free will. Read Acts 2, giving emphasis to verses 23-24. What stands out to you in that passage?
Ask: "What would God have accomplished through causing the Jews and Romans to think they had killed Jesus?" God is sovereign and knows everything. Would he have done this “scheme” if he knew that it would create a blasphemy (Christianity)? Many people saw Jesus die, and saw him after the resurrection. Would a just and loving God deceive people like this? Read Acts chapters 1 through 4. What we see here, several times, is the disciples proclaiming the death and resurrection of Christ for the forgiveness of sins, and people converting by the thousands. And we see the disciples healing, in the name of Jesus. The text clearly shows that God has put his stamp of approval on their message, because if it weren't true, this would have been the time for him to stop it! (Incidentally, Acts also stands as proof that the New Testament has not been corrupted. This entire book rests on the premise that Jesus was crucified, resurrected, and provides forgiveness for sins, and that the disciples dedicated their lives to proclaim this message; if you take the passages out which support that premise, there is nothing left of the book.)
Ask: "If Jesus didn’t die and rise from the dead, what explanation can you find for the change in the disciples?" Read Matthew 26-28 (full chapters). Next, read John 13-21 (in full). What stands out to you in these passages?
Ask: "If Allah would deceive humans about something so serious as how we can be saved on Judgement Day...how can you trust anything He says?" Explain to your friend that hundreds of prophecies exist that pointed to the birth, death, and resurrection of al-Masih (the Messiah). Read Isaiah 53 together. If Allah would deceive people about the crucifixion of al-Masih...is this prophecy a deception also? What does it mean to your friend that Allah is "Al-Macker" (the Deceiver, or Schemer)? (Al-Macker is one of the "99 Beautiful Names of God.") Read John 8:1-59 together. Is it right to call God "the Deceiver"? Who, according to God's Word, practices deceit? Who speaks Truth? If God speaks Truth, is it logical, reverent, or appropriate to say that he deceived mankind?