Just to echo TAH and jojo, when asked a question try to be as ambiguous as possible (great responses, jojo, BTW!).

One time I was walking down the West End road and a tough-looking local stopped me as I passed by the gates of his yard. The exchange went something like this:

Local: Hey Mon, you need some ganja?
Me: No thanks, I'm all set.
Local: How about some coke?
Me: No way, man.
Local: Where you staying?
Me: Up on the Beach Rd. (I was actually staying at Negril Escape)
The local smiles and gives me a fist bump
Local: Respect, mon.
I smile and peacefully continue my walk down the road.

Basically, be respectful without giving away too much information.