This chapter depicts the American and Israeli failure, in the first four months of hostilities along the Suez Canal, to understand that the area was facing renewed conflict and another round of war. A direct consequence of that failure was the inability of both sides to adopt a suitable policy towards the emerging crisis. The chapter examines the beginning of the War of Attrition in the diplomatic arena, the Egyptian aims and objectives, and the American reaction. Other than presenting the facts, this chapter examines what the United States thought of the Egyptian moves, if and how much the United States was influenced by those moves, and Egyptian President Nasser’s reaction to the steps taken by the Americans.