On 26 July 1956, Egyptian President Gamal Abdel Nasser announced that Egypt was nationalising the Suez Canal Company. Egyptian officials immediately began taking control of its offices and operations.

The canal crossed Egyptian territory but was operated by a company dominated by British and French interests. It provided a short shipping route between the Mediterranean and the Red Sea. It remained important to European trade and oil supplies.

Britain had withdrawn its remaining troops from the Canal Zone in June 1956 under an agreement with Egypt. The following month, the United States and Britain withdrew financial support for the proposed Aswan High Dam.

Nasser responded by taking control of the canal company. He said its revenue would help Egypt finance the dam. The Egyptian government promised compensation to shareholders.

Prime Minister Anthony Eden’s government regarded the decision as a threat to British financial, strategic and political interests. Eden also feared that accepting the nationalisation would increase Nasser’s influence across the Arab world.

Britain and France tried to establish international control of the canal through diplomacy. When those efforts failed, they prepared military action.

In October, British and French representatives met Israeli officials secretly at Sèvres in France. Israel would invade the Egyptian Sinai. Britain and France would then order both countries to withdraw from the canal and intervene when Egypt refused.

Israel attacked on 29 October. Britain and France issued their ultimatum the following day and began bombing Egypt on 31 October. Their troops later landed near Port Said.

The operation occupied part of the Canal Zone but failed politically. The United States had not approved the invasion and demanded a ceasefire. President Dwight Eisenhower’s administration refused to support Britain against pressure on sterling unless the operation ended.

Britain accepted a ceasefire on 6 November. British and French forces withdrew, while Egypt retained control of the canal.

Nasser gained political authority. Eden resigned as prime minister in January 1957. Britain had shown that it could mount a military operation. Still, it could not sustain one against American financial and diplomatic opposition.