With a crew of approximately 2.4 million Egyptian workers, the former French consul Lesseps built the canal which took over 125,000 lives over the course of construction. The Suez Canal was finally opened in 1869, after ten years of construction financed by the French and Egyptian government.
The canal quickly became a key shortcut for goods traveling from India and China to Europe. Before that time all the merchandise had to be shipped all the way around Africa, which meant a journey of several months. In 1956, the Suez Canal that represented the only direct means of travel from the Mediterranean to the Indian Ocean became the focus of a major world conflict. The canal had a vital role for the trade flow between Asia, the Middle East, Europe and the United States.
Normally, free passage was granted to all who used the canal. But Great Britain and France desired control of it, mostly for commercial shipping and in order to pursue colonial interests.
The Aswan High Dam dispute
The Egyptian government was led by the President Gamal Abdel Nasser, who was promised international aid in the construction of the Aswan High Dam in the Nile from the United States and Britain. The Aswan High Dam was an important project intended to tame the Nile and provide hydroelectric power to Egypt growing cities. However, since President Nasser developed close ties with the Soviet Union the western countries withdrew the offer to help.
On July 26, 1956, President Nasser retaliated by declaring martial law in the Suez Canal and seized control of the area, effectively nationalizing it. His intent was to use the funds raised from the canal daily operation to pay for the Dam project.
All the diplomatic efforts to achieve an understanding from Britain and France failed. In lack of agreement with Egypt, through an alliance with Israel the countries developed a strategy to overthrow President Nasser. The Israeli army marched toward the canal on October 29, 1956. The Great Britain and France presented themselves as peacekeepers and occupied the canal zone. Within ten days, British and French forces had completely occupied the entire Suez region.
Egypt response was sinking 40 ships in the canal and blocking passage for all ships. Tensions in the international community grew, especially among the two superpowers in the midst of the Cold War. Both the United States and the Soviet Union came close to a military intervention, but opted for diplomatic pressure instead.
Through the United Nations the two superpowers sought to resolve the conflict and pressured the two European powers to back down. Britain and France eventually backed down, giving control of the canal back to Egypt in March 1957. The Egyptian government was allowed to maintain control of the canal as long as they permitted ships from all countries a free passage.