(July– Nov. 1956)
Following the Anglo‐American refusal to finance the Aswan Dam in southern Egypt, the Egyptian President, Nasser, nationalized the Suez Canal on 26 July 1956 to provide much‐needed investment capital. In response, Britain and France wished to overthrow the President, partly because most of the shares in the canal had been owned in these countries. Britain and France were also alarmed by Nasser's Arab nationalism, the nature of which was hostile to the continuing colonial presence of the two powers in the African and Arab world. To provide a pretext for military intervention, Israel agreed to begin military hostilities by invading the Sinai peninsula from 29 October, and on 5 November British and French forces began to land in Port Said and occupy the Suez Canal, ostensibly to ensure the safety of the canal's traffic.
Large sections of the British and French public were opposed to the invasion and, more crucially, the occupation was greeted with international hostility led by the USA. Faced with a plummeting national currency which the USA refused to support, Britain and France agreed to a cease‐fire on 6 November, and withdrew their troops over the following month. The crisis confirmed the loss of British and French superpower status, as they proved unable to act on the international scene without US support. In Britain, it led to the resignation of Anthony Eden two months later, while in France it accelerated the collapse of the Fourth Republic. Instead of humiliating Nasser, the crisis increased his appeal in the Arab world as the one who had successfully overcome an assault of Britain, France, and Israel.