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Rundown:
The 1948–49 War where Israel proclaimed independence and Egypt + Arab League invaded was considered a defeat.
In 1952, Nasser launched an army coup taking back power from a 140 year old Turkish dynasty in Egypt that started with Mohammed Ali and ended with King Faroud. Nasser's rule meant that for the first time since the Persian conquest 250 years previous, Egypt was under Egyptian rule, marking a historic change for the country and for other Middle Eastern countries that were divided by French and British colonial powers.
Nasser wanted to modernize his country, as well as regulate the flow of the Nile, give a source of irrigation and provide energy to citizens, and he thought of the Aswan High Dam project, which British and American forces from the onset supported.
In March 1955, Israel launched an air strike in the Gaza strip, to which Nasser thought it was a Western conspiracy to destroy his government. He then made an arms agreement with the Soviet Union in return for cotton.
The US then withdrew funding support for the Aswan Dam project in July of 1956, and Britain followed thinking it would reign in Nasser's dealings.
However, the opposite happened, and on July 26, 1956 Nasser nationalized the Suez Canal and announced that all the profits that would have gone to the Canal company would from then on be channelled to fund the Aswan Dam project.
England felt their commercial interests and oil revenues would be at stake and France felt he was stoking nationalist rebellion in Algeria, so they joined together to concert a strike against Egypt with Israel and along with the strikes they dropped leaflets encouraging the population to overthrow the government.
The US, however, preferred economic pressure and negotiation- military action would be used only if traffic in the Suez Canal stopped.
Nasser then sunk 47 ships, blocking traffic and cutting off oil supplies.
Britain faced universal condemnation, including the US, which passed a resolution along with 64 other countries demanding withdrawl. The Soviet Union threatened to intervene and Saudi Arabia broke off diplomatic relations wiht Britain.
He withstood the "triple aggression" from France, Britain, and Israel. He then went on to nationalize British and French companies (15,000 of them), requiring Egyptian shareholding and management. 2 years later, in 1958, Nasser signed an agreement with the Soviet Union for the funds for the Aswan Dam project to go ahead.
This was part of the "beginning of the end" of colonialism in Africa, and Egypt showed that the country could withstand foreign aggressions. It literally launched him into hero status, leading to a feeling of pan-Arabism throughout the Middle East.
However, the 1967 war against Israel that came later was considered a scathing defeat and showed Israeli's military superiority, "checking" Arab feelings of invincibility.
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