British troops had protected the neutrality of the Anglo-French-owned Suez Canal for nearly 70 years, but in June 1956, Britain handed that responsibility to Egypt under the terms of a treaty (stating that control of the waterway should remain with the international Suez Canal Company) signed 20 months earlier.
Eleven days later, Colonel Gamal Abd al-Nasser was elected President of Egypt, and a month after that he triggered an international crisis when he nationalised the Canal in direct breach of the 1954 treaty.
President Nasser’s move was aimed at raising alternative funds to pay for the construction of Egypt’s Aswan Dam following the withdrawal of financial aid by the United States and Britain, who objected to Egypt’s purchase of arms from the Soviet Union.
Britain and France, however, did not want to lose influence over the canal or pay exorbitant fees to send their ships through the vital route linking the Red Sea and the Mediterranean Sea.
Thus, when Israel invaded Egypt on 29 October hoping to strengthen its position in the Middle East, both Britain and France supported the action and sent forces to occupy the Canal Zone.
The military intervention met Soviet protest and considerable domestic opposition, and the USA did not support it.
On 3 November, under pressure from both the US and the USSR, Britain and France agreed to withdraw – an agreement widely regarded as a major defeat, but one which ended the crisis.
British, French, and Australian relations with the USA were greatly strained during this period and the crisis resulted in the resignation of British prime minister Anthony Eden.