We generalize the dispersive theory of the Jaynes-Cummings model beyond the frequently employed rotating-wave approximation RWA in the coupling between the two-level system and the resonator. For a detuning sufficiently larger than the qubit-oscillator coupling, we diagonalize the non-RWA Hamiltonian and discuss the differences to the known RWA results. Our results extend the regime in which dispersive qubit readout is possible. If several qubits are coupled to one resonator, an effective qubit-qubit interaction of Ising type emerges, whereas RWA leads to isotropic XY interaction. This impacts on the entanglement characteristics of the qubits.