The Meir government's rejection of Sadat's peace overtures convinced the Egyptian president that to alter the status quo and gain needed legitimacy at home he must initiate a war with limited objectives. On Yom Kippur, the Jewish Day of Atonement, October 6, 1973, Syria and Egypt launched a surprise attack against Israel. In the south, waves of Egyptian infantrymen crossed the Suez Canal and overran the defense of the much touted Bar-Lev Line. In the north, Syrian forces outnumbering the Israeli defenders (1,100 Syrian tanks against 157 Israeli tanks) reached the outer perimeter of the Golan Heights overlooking the Hula Basin. In the first few days of the war, Israeli counterattacks failed, Israel suffered hundreds of casualties, and lost nearly 150 planes. Finally, on October 10 the tide of the war turned; the Syrians were driven out of all territories conquered by them at the beginning of the war and on the following day Israeli forces advanced into Syria proper, about twenty kilometers from the outskirts of Damascus. The Soviet Union responded by making massive airlifts to Damascus and Cairo, which were matched by equally large United States airlifts to Israel. In the south, an Egyptian offensive into Sinai was repelled, and Israeli forces led by General Ariel Sharon crossed the canal to surround the Egyptian Third Army. At the urgent request of the Soviet Union, United States Secretary of State Henry Kissinger went to Moscow to negotiate a cease-fire arrangement. This arrangement found expression in UN Security Council Resolution 338, which called for a cease-fire to be in place within twelve hours, for the implementation of Resolution 242, and for "negotiations between the parties concerned under appropriate auspices aimed at establishing a just and durable peace in the Middle East." Following Kissinger's return to Washington, the Soviets announced that Israel had broken the terms of the cease-fire and was threatening to destroy the besieged Egyptian Third Army. Soviet leader Leonid Brezhnev informed Nixon that if the siege were not lifted the Soviet Union would take unilateral steps. The United States pressured Israel, and the final cease-fire took effect on October 25.

The October 1973 War had a devastating effect on Israel. More than 6,000 troops had been killed or wounded in eighteen days of fighting. The loss of equipment and the decline of production and exports as a consequence of mobilization came to nearly US$7 billion, the equivalent of Israel's gross national product (GNP) for an entire year. Most important, the image of an invincible Israel that had prevailed since the June 1967 War was destroyed forever. Whereas the June 1967 War had given Israel in general and the declining Labor Party in particular a badly needed morale booster, the events of October 1973 shook the country's self-confidence and cast a shadow over the competence of the Labor elite. A war-weary public was especially critical of Minister of Defense Dayan, who nonetheless escaped criticism in the report of the Agranat Commission, a body established after the war to determine responsibility for Israel's military unpreparedness.

Israel's vulnerability during the war led to another important development: its increasing dependence on United States military, economic, and diplomatic aid. The war set off a spiraling regional arms race in which Israel was hard pressed to match the Arab states, which were enriched by skyrocketing world oil prices. The vastly improved Arab arsenals forced Israel to spend increasingly on defense, straining its already strapped economy. The emergence of Arab oil as a political weapon further isolated Israel in the world community. The Arab oil boycott that accompanied the war and the subsequent quadrupling of world oil prices dramatized the West's dependence on Arab oil production. Evidence of this dependence was reflected, for example, in the denial of permission during the fighting for United States transport planes carrying weapons to Israel to land anywhere in Europe except Portugal.

The dominant personality in the postwar settlement period was Kissinger. Kissinger believed that the combination of Israel's increased dependence on the United States and Sadat's desire to portray the war as an Egyptian victory and regain Sinai allowed for an American-brokered settlement. The key to this diplomatic strategy was that only Washington could induce a vulnerable Israel to exchange territories for peace in the south.

The first direct Israeli-Egyptian talks following the war were held at Kilometer 101 on the Cairo-Suez road. They dealt with stabilizing the cease-fire and supplying Egypt's surrounded Third Army. Following these talks, Kissinger began his highly publicized "shuttle diplomacy," moving between Jerusalem and the Arab capitals trying to work out an agreement. In January 1974, Kissinger, along with Sadat and Dayan, devised the First Sinai Disengagement Agreement, which called for thinning out forces in the Suez Canal zone and restoring the UN buffer zone. The published plan was accompanied by private (but leaked) assurances from the United States to Israel that Egypt would not interfere with Israeli freedom of navigation in the Red Sea and that UN forces would not be withdrawn without the consent of both sides. Following the signing of this agreement, Kissinger shuttled between Damascus and Jerusalem, finally attaining an agreement that called for Israel to withdraw from its forward positions in the Golan Heights, including the return of the Syrian town of Al Qunaytirah. The evacuated zone was to be demilitarized and monitored by a UN Disengagement Observer Force (UNDOF).

After the signing of the Israeli-Syrian Disengagement Agreement in June 1974, the public mood in Israel shifted against concessions. In part, Israel's hardened stance was a reaction to the 1974 Arab summit in Rabat, Morocco. At that summit, both Syria and Egypt supported a resolution recognizing the PLO as the sole representative of the Palestinian people. The Israeli public viewed the PLO as a terrorist organization bent on destroying the Jewish state. Throughout 1974 Palestinian terrorism increased; in the summer alone there were attacks in Qiryat Shemona, Maalot, and Jerusalem.

Another important factor underlying Israel's firmer stance was an internal political struggle in the newly elected government of Yitzhak Rabin. Rabin had narrowly defeated his chief rival Shimon Peres in bitterly fought internal Labor Party elections in late December 1973. Peres, who was appointed minister of defense, forced Israel into a less flexible posture by blocking any concessions proposed by Rabin. In addition, the issuing of the Agranat Commission report and the return from the front of reservists mobilized for the war further fueled public clamor for a stronger defense posture.

In Washington, President Gerald R. Ford, facing a recalcitrant Israel and under pressure from the pro-Israel lobby, decided to sweeten the offer to Israel. The United States pledged to provide Israel US$2 billion in financial aid, to drop the idea of an interim withdrawal in the West Bank, and to accept that only cosmetic changes could be expected in the Second Syrian-Israeli Disengagement Agreement. In addition, in a special secret memorandum Israel received a pledge that the United States would not deal with the PLO as long as the PLO failed to recognize Israel's right to exist and failed to accept Security Council Resolution 242. In September 1975, Israel signed the Second Sinai Disengagement Agreement, which called for Israel to withdraw from the Sinai passes, leaving them as a demilitarized zone monitored by American technicians and the UNEF.

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Source: U.S. Library of Congress