Between October 1178 and April 1179, Baldwin began the first stages of constructing his new line of defense, a fortification called Chastellet at Jacob's Ford. While construction was in progress, Saladin became fully aware of the task he would have to overcome at Jacob's Ford if he were to protect Syria and conquer Jerusalem. At the time, he was unable to stop the erection of Chastellet by military force because a large portion of his troops were stationed in northern Syria, putting down Muslim rebellions. By the summer of 1179, Baldwin's forces had constructed a stone wall of massive proportions.

Saladin summoned a large Muslim army to march southeast towards Jacob’s Ford. On 23 August 1179, Saladin arrived at Jacob’s Ford and ordered his troops to shoot arrows at the castle, thus initiating the siege. Saladin and his troops entered Chastellet. By 30 August 1179, the Muslim invaders had pillaged the castle at Jacob's Ford and killed most of its residents. On the same day, less than one week after reinforcements were called, Baldwin and his supporting army set out from Tiberias, only to discover smoke permeating the horizon directly above Chastellet. Obviously, they were too late to save the 700 knights, architects, and construction workers who were killed and the other 800 who were taken captive.