The Suez Canal in Egypt was opened in 1869. The shipping canal is 171 km (106 miles) long and connects the Mediterranean at Port Said with the Red Sea. A substantial shareholding (172,602 shares) was purchased by the British government in 1875.
In 1882 the British Army occupied Egypt in order to protect the Suez Canal. They remained in Egypt and the British government installed a Counsul-General to rule the country. On the outbreak of the Second World War the British had 36,000 troops guarding the canal and the Arabian oil fields.
In 1952 General Mohammed Neguib and Colonel Gamal Abdel Nasser forced Farouk I to abdicate. After the Egyptian Revolution Neguib became commander-in-chief, prime minister and president of the republic whereas Nasser held the post of Minister of the Interior.
In April 1954 Nasser replaced Neguib as prime minister. Seven months later he also became president of Egypt. Over the next few months Nasser made it clear he was in favour of liberating Palestine from the Jews. He also began buying fighter aircraft, bombers and tanks from the Soviet Union and Czechoslovakia.
Gamal Abdel Nasser redistributed land in Egypt and began plans to industrialize the country. He also began the building of the Aswan Dam. Nasser was convinced that this would extend arable lands in Egypt and would help the industrialization process. He also advocated Arab independence and reminded the British government that the agreement allowing to keep soldiers at Suez expired in 1956.
President Dwight Eisenhower became concerned about the close relationship developing between Egypt and the Soviet Union. In July 1956 Eisenhower cancelled a promised grant of 56 million dollars towards the building of the Aswan Dam. Nasser was furious and on 26th July he announced he intended to nationalize the Suez Canal. The shareowners, the majority of whom were from Britain and France, were promised compensation. Nasser argued that the revenues from the Suez Canal would help to finance the Aswan Dam.
Anthony Eden, the British prime minister, feared that Nasser intended to form an Arab Alliance that would cut off oil supplies to Europe. On 21st October Guy Mollet, Anthony Eden and David Ben-Gurion met in secret to discuss the problem. During these talks it was agreed to make a joint attack on Egypt.
On 29th October 1956, the Israeli Army, led by General Moshe Dayan, invaded Egypt. Two days later British and French bombed Egyptian airfields. British and French troops landed at Port Said at the northern end of the Suez Canal on 5th November. By this time the Israelis had captured the Sinai peninsula.
President Dwight Eisenhower grew increasingly concerned about these developments. On 30th October he decided to take action and announced he was going to suspend aid to Israel in protest against its invasion of Egypt. The following day Eisenhower's secretary of state, John Foster Dulles, criticised Britain and France for trying to take the Suez Canal by force.
In the House of Commons on 1st November, William Yates, a Conservative Party MP, interrupted on a point of order and said, "I have come to the conclusion that Her Majesty's Government has been involved in an international conspiracy". Later that day representatives from the United States and the Soviet Union at the United Nations joined forces and demanded a cease-fire. The British and French vetoed a cease-fire in the Security Council but the General Assembly passed it by a vote of 64-5 vote. Faced by a united international community, the governments of Britain, France and Israel agreed to withdraw. They were then replaced by UN troops who policed the Egyptian frontier.
Gamal Abdel Nasser now blocked the Suez Canal. He also used his new status to urge Arab nations to reduce oil exports to Western Europe. As a result petrol rationing had to be introduced in several countries and two months after the invasion, Anthony Eden was forced to resign from office. Guy Mollet and his government collapsed in May 1957.