With Italy bowing out of the war, the Germans moved to disarm their former allies as quickly as possible. On Cephalonia, Gen. Antonio Gandin of the 33rd "Acqui" Division faced a dilemma. His government issued clear orders to cease hostilities against the Allies, but maintain his unit in a state of readiness. The 11th Army command ordered him to turn his weapons over to the small German unit on the island. While Gandin discussed his options with the island's coast artillery and naval commanders, ships carrying a German battle group drawn from the 1st Mountain Division, 104th Light Division and some independent units appeared offshore. The Germans opened fire, the Italians returned it, and bitter fighting exploded. To get to the island's capital, the Germans would have to force their way through a number of rocky passes.

The German battalion forced its way past the Italian defenders, inflicting severe casualties on their former allies. But the Italians fought resolutely, and caused quite a few German losses as well. Anger over these combat deaths would lead to tragic consequences a few days later, as the fight for Cephalonia grew more heated.