Anwar Sadat, Nasser’s successor, came to power in an Egypt that had serious financial troubles, not the least of which were those brought about by the country’s defeat in the Six-Day War. The Sinai oil fields appeared to be a way to alleviate these troubles, but Israel had captured the Sinai Peninsula in 1967. Concluding that negotiation with Israel was not an option, Sadat prepared to attack Israel.

On October 6, 1973, Egypt and Syria launched a surprise attack on Israel. The day was well-chosen, for it was Yom Kippur ("Day of Atonement"), the holiest day in the Jewish calendar, and the Israelis were thus quite unprepared for war. For the first three days of the war, the Israelis seemed to have been defeated. However, the U.S. provided Israel with military aid, and, over the course of the next few weeks, the Israelis succeeded in pushing back the Syrians and the Egyptians.

On October 22, the UN Security Council passed Resolution 338. According to the Resolution, "The Security Council (1) Calls upon all parties to present fighting to cease all firing and terminate all military activity immediately...; (2) Calls upon all parties concerned to start immediately after the cease-fire the implementation of Security Council Resolution 242 (1967) in all of its parts; (3) Decided that, immediately and concurrently with the cease-fire, negotiations start between the parties concerned under appropriate auspices aimed at establishing a just and durable peace in the Middle East." However, the peace negotiations demanded by Resolution 338 would not begin for a little under a decade.

The Yom Kippur War formally ended with the Sinai I and II agreements, negotiated by U.S. Secretary of State Henry Kissenger. In accordance with the agreements, Israel returned a great deal of the Sinai to Egypt.

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