On June 19, 1919, the Iron Division supported by the Landeswehr launched a major thrust north of Cesis. Initially, the Freikorps captured the town of Straupe and continued their advance toward Limbazi, thus initiating the Battle of Wenden that would rage for four days across a 20-kilometer front. The Estonians launched a counterattack and drove the Freikorps out of Limbazi. On June 21, the Estonians received reinforcements and immediately attacked the Landeswehr who were forced to withdraw. The Iron Division attacked from Straupe towards Stalbe in an effort to relieve pressure on the Landeswehr. On the morning of June 22, the two divisions squared off for a blood match that would decide the fate of Latvia.

The Iron Division crumpled under the strong attack of the Estonians, and subsequently the Baltic Germans retreated toward Riga. The Allies again insisted that the Germans withdraw their remaining troops from Latvia, and on July 3 intervened to impose an armistice between Estonia, Latvia and the Baltic Germans as the Estonians and Latvians were about to march into Riga. The British insisted that Von der Goltz leave Latvia. Lieutenant-Colonel Harold Alexander, a British offcer, was given command of the Landeswehr which was incorporated in Latvian national army and sent to Eastern Latvia against the Bolsheviks. Estonia turned its forces east again to deal with the remaining Russian threat on their southeastern flank.