The effect of the '73 war on the Palestinians was very important however, because it signified that the Arab states had given up opposing the existence of the state of Israel by accepting Security Council Resolution 242, which calls for all states in the region to live in peace and to accept them and to recognize them. Syria and Egypt had in effect decided that they would come to terms with Israel. The terms on which they would do so had not yet been agreed. The handwriting was on the wall for the Palestinians. The Arab countries no longer would support them in trying to oppose the existence of the state of Israel.
Israel's military victory in 1973 came at a heavy price of more than 2,400 lives and an estimated US$5 billion in equipment, of which more than US$1 billion was airlifted by the United States during the war when it became apparent that Israel's ammunition stores were dangerously low. This action, and the threatened Soviet intervention, raised more clearly than ever the specter of the Arab-Israeli conflict escalating rapidly into a confrontation between the superpowers. The October 1973 War also cost Israel its self-confidence in its military superiority over its Arab enemy.
...with the U.S. mediating after the war, Israel agreed to return part of the Sinai and the Golan Heights to Egypt and Syria.
Overall, the war restored some of the Arab pride that had been so badly wounded in 1967, arguably enabling some of the peace efforts in the decades that followed.
Israel’s violation of the UN ceasefire resolution led to a superpower crisis... the Kremlin started making preparations for direct intervention in the conflict, warning Washington that the USSR would take unilateral steps to stop Israel’s aggression if it did not adhere to the ceasefire. In response, the United States raised its state of nuclear alert... At the same time, however, Secretary of State Henry Kissinger increased the pressure on Israel to adhere to the ceasefire and avoid the complete destruction of the Egyptian Third Army. The combination of a new ceasefire resolution (339), the superpower crisis and the fact that Israel had achieved a major military victory led to a more stable ceasefire on October 24 and to the end of the Yom Kippur War.
In response to U.S. and European support for Israel in the 1973 Arab-Israeli War (the Yom Kippur War), the Arab members of OPEC, plus Egypt and Syria, announced that they would no longer ship oil to the U.S. and its Allies. The resultant drop in supply, in concert by the vigorous efforts of some OPEC members to raise prices, caused oil prices to increase by more than 400% in less than six months.
Israel made dramatic battlefield gains on all fronts until an Oct. 14 U.N.-Security Council-approved ceasefire brought the fighting to a halt.
But then Israel's current Prime Minister, Ariel Sharon -- who was at the time a major general commanding a division -- broke the ceasefire and began to encircle the Egyptian Third Army, opening the way to Cairo.
The tide of the war began to turn on October 10. The Syrians were pushed back and Israel advanced into Syria proper. The Soviet Union responded by sending airlifts to Damascus and Cairo, which were answered on October 12 and 13 by massive US airlifts to Israel. Israeli forces crossed the Suez Canal and surrounded the Egyptian Third Army on October 21.
The Egyptian army widened its bridgeheads and poured large forces across the Suez Canal into the Sinai. Many of the Israeli posts on the "Bar Lev line", the defensive system along the Canal, were surrounded and some were captured by the Egyptian army...In the centre and south of the Golan Heights the main Syrian force had broken through the IDF lines and penetrated deeply into the Heights, while only a weak force opposed them, which was not able to hold them off.
The Yom Kippur War started with a surprise Arab attack on Israel on Saturday 6th October 1973. On this day, Egyptian and Syrian military forces launched an attack knowing that the military of Israel would be participating in the religious celebrations associated with Yom Kippur. Therefore, their guard would temporarily be dropped.
Peace efforts on the Middle East made little progress prior to 1973. During the early 1970s, UN envoy Gunnar Jarring and U.S. Secretary of State William Rogers floated plans to settle disputed issues, but their initiatives failed. The Israelis, who were internally divided over the basis for a settlement, were unresponsive to Egyptian overtures...
With diplomacy stalemated, during 1972 and 1973, Sadat believed that the military option was necessary to secure U.S. political intervention and to facilitate negotiations... To make the military option workable, that is to disperse Israeli forces during war, Sadat realized that he needed partners. A non-military ally was King Faisal of Saudi Arabia, who promised to use the oil weapon against the United States. For military action, Sadat turned to Syrian President Hafez el-Assad