Salvation has been made available through the grace of God (through His mercy and favor) but can only be accepted through one's faith (belief) and once a person has accepted this gift they will change their ways and their "works".

So the answer is: Salvation is by grace AND by faith AND by works. All three must work together or it doesn't work at all.
Ephesians 2:8 For by grace are ye saved through faith; and that not of yourselves: it is the gift of God:
Hebrews 11:6 But without faith it is impossible to please him: for he that cometh to God must believe that he is, and that he is a rewarder of them that diligently seek him.
James 2:26 For as the body without the spirit is dead, so faith without works is dead also.
John 3:16 For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.

Answered by Jai Sri Ram , an ibibo Master, at 4:28 PM on December 20, 2008