In spite of the truce signed with Saladin, an adventurer, Renaud de Châtillon, attacked a caravan of Muslim pilgrims of the way from Cairo to Damas. Saladin officially asked the Frankish Lords the return the spoils and the prisoners, but the Lords refused to hear him. Saladin considered this rejection released him from his obligation to respect the truce.
In March, Saladin gathered his troops and walked to Montreal and Kerak, both of which he devastated. He then headed North towards the County of Tripoli. On the way, he met a Frankish detachment on its way to the Court of Raymond III. This detachment was contained, amongst others, the Masters of the Temple (Gerard de Ridefort) and the Hopital (Roger des Moulins).
Taking no notice of the advice of Roger des Moulins, Gerard de Ridefort led the Franks on an assault of Saladin’s force. The Franks were torn to pieces. All the surviving Templars were captured and beheaded. All except the Master, Gerard de Ridefort who managed to flee the carnage.
Frankish barons, faced with the danger represented by Saladin, forgot their dissensions and united their forces to face the Muslims.
An army composed of more than 2000 knights and 30000 foot soldiers left Saphoria in the direction of Tiberiade; a city besieged by Saladin.
Saladin learned of the army and decided to confront them. He encountered the Frankish near Miskinah where skirmishes broke out. The Frankish barons decided to leave Tiberiade and entrench themselves around water points near Hattin. But, on the evening of July 3rd, the Muslim army forced a situation where the Franks had to camp 5 km from the springs. Their camp was on the basaltic peak of the Horn of Hattin; an exposed location without water and without shade from the sun.
On the morning of July 4th the Franks mounted several charges to try to break the Muslim line surrounding them. On each occasion they failed. The Franks lost a lot of soldiers and horses during these desperate charges.
Some knights in the rearguard did manage to escape, however the rest of the Frankish army yielded to assaults by Saladin army’s.
Most of the Frankish barons were captured. They were released after payment of a big ransom. The other prisoners, either too proud or too poor to afford the ransom, were sold into slavery. The Templars and Hospitalers captured alive were beheaded immediately.
Saladin considered them dangerous enemies so he ensured they would never again rise up in arms against him.
Only the Master of the Temple, Gerard de Ridefort, escaped the fate of his companions. He was imprisoned.
In addition to the disaster of losing the army, during the battle, Christendom also lost the Real Cross which disappeared forever. After the defeat at Hattin, nearly all the kingdom of Jerusalem fell into the hands of Saladin. All that remained in Christian hands was the city of Tyre, and some strongholds inside the country.