In 1179, Saladin again invaded the Crusader states, from the direction of Damascus. He based his army at Banias and sent raiding forces to despoil villages and crops near Sidon and the coastal areas. Farmers and townspeople impoverished by Saracen raiders would be unable to pay rent to their Frankish overlords. Unless stopped, Saladin's destructive policy would weaken the Crusader kingdom.

In response, Baldwin moved his army to Tiberias on the Sea of Galilee. From there he marched north-northwest to the stronghold of Safed. Together with the Knights Templar led by Odo of St Amand and a force from the County of Tripoli led by Count Raymond III, Baldwin moved northeast.

The battle ended in a decisive victory for the Muslims and is considered the first in the long series of Islamic victories under Saladin against the Christians. The Christian king, Baldwin IV, who was crippled by leprosy, narrowly escaped being captured in the rout.