In 1955 Nasser had announced the signing of an arms agreement between Egypt and Czechoslovakia (acting for the Soviet Union). Alarmed by the possibility of an alliance between Egypt and the Eastern bloc, the United States and Britain offered to help fund the most ambitious of Nasser’s development projects for Egypt, the construction of a new dam at Aswan on the Nile. The Aswan High Dam would irrigate new lands for agricultural expansion and produce hydroelectric power. American and British leaders hoped this would keep Egypt from slipping further into the sphere of Soviet influence. Nasser hesitated, however, hoping for a better offer of aid from the Soviets. He also recognized the communist government of the People’s Republic of China.
When he did finally accept the Western offer to finance the dam, he was told abruptly that the offer had been withdrawn. Viewing the withdrawal as an insult to Egyptian national dignity, Nasser suddenly nationalized the Suez Canal, which was still controlled primarily by British and French shareholders. The revenues from the canal would help pay for the Aswan High Dam. Nationalizing the canal was also a public way of asserting Egypt’s independence from continuing efforts at European domination of the country. For Arabs and anticolonial nationalists everywhere, Nasser became a great hero. To the West and especially to Britain, however, he became a demon. His nationalization of the Suez Canal eventually led to confrontation with the old colonial powers. The countries that felt most directly threatened by the move were Britain, France, and Israel.
Israel was especially alarmed because the Egyptians refused to allow Israeli ships to pass through the canal. Britain and France also were outraged by the maneuver because they both had a stake in the company that had built the canal. The British in particular worried about the strategic implications of an independent Egypt, friendly to the Soviet Union, controlling such a strategic waterway, through which much of the world’s trade passed. The French were also angry that Nasser was encouraging anti-French movements in North Africa. With careful, secret planning, Israel, Britain, and France conspired to overthrow Nasser and take control of the canal. They agreed that Israel should launch a lightning attack across the canal into Egypt. Britain and France would then intervene, supposedly to separate the Israelis and Egyptians, but in reality, to help destroy the Egyptian armed forces, especially the air force, and reestablish European control over Suez. At first all went well with the plan.
In 1956 Israel launched a sudden invasion, seizing the Gaza Strip and Egyptian-administered coastal district adjoining Israel’s southern border. The Israelis then defeated the Egyptians in the Sinai Peninsula and advanced toward the canal. Great Britain and France sent an ultimatum to Egypt demanding a cease-fire. They also insisted on temporary British-French occupation of the canal. When Egypt refused, British and French troops seized the Mediterranean end of the canal. Both sides placed ships in the canal and sank them to block it. Worried that the Soviets would be drawn into the crisis, the United States, under President Eisenhower, decided to intervene. Privately, Eisenhower threatened to cut off all American aid to Britain unless the invasion ended and the Anglo-French forces withdrew. Unable to withstand such a threat, the British agreed and the invasion collapsed. In a settlement negotiated at the United Nations, Britain and France withdrew their forces.
The Israelis gained a vague guarantee to allow Israeli ships in the canal, which Egypt later blockaded. Then they also withdrew. A UN force was sent to patrol the cease-fire line between the Israelis and the Egyptians in the Sinai Desert. As Egypt emerged from the war still in control of the canal, Nasser claimed victory over the European imperialists and Israel. Throughout the world, the Suez Crisis was seen as the final defeat of European imperialism. Nasser himself became the most popular leader in the Arab world. In the aftermath of the Suez Crisis, many Middle Eastern countries began to pursue new courses of political and social development.