Outremer
Montgisard
The general story of the next decade is that of Saladin trying to maneuver into a position where he could strike at the Christians effectively, while he was distracted from his principal goal by various problems among the Muslims. On the Christian side, we see regular defeats sprinkled with occasional victories, while all the time the two factions within the Kingdom rendered it more and more vulnerable. Both sides were trying to stop Saladin, but neither side was willing to yield advantage to the other in the struggle.
In 1175 the Franks helped the atabeg of Aleppo save the city from Saladin. In gratitude he released Joscelin of Courtenay, who still took the title of Count of Edessa, and Reynald of Châtillon, a charming and ambitious adventurer from the West who had been in prison for a decade. Soon after his release, Reynald married Stephanie of Oultrejourdain and took up residence there.
In 1176, Saladin was in the north again, bringing Aleppo to heel, though he was unable to take the city itself. King Baldwin's leprosy continued to progress and the barons sought out a wife for his older sister Sibylla. They found one in William of Montferrat, but he had hardly even been married before he died of malaria early in 1177.
The Leper King was able to inflict one major defeat on Saladin in 1177, at Montgisard. Saladin had managed to besiege the Templars at Gaza and the King at Ascalon, then he marched on Jerusalem itself. Believing there was no army in the field to oppose him, he grew careless and let large foraging parties plunder the region. In the meantime, Baldwin sent word to Gaza. The Templars broke out of their fortress and came to the King's rescue. The Franks now had enough men to call an army, so they set out in pursuit of Saladin. They caught up with him near Jerusalem on November 25th, catching him completely by surprise.
Montgisard was a tremendous victory for Jerusalem and Saladin's prestige suffered. This helps explain why 1178 was quiet and why Saladin sought revenge as soon as he could. He was able to gain some redress in 1179 when he inflicted a defeat on the Franks at Marj Ayun (the Valley of the Springs), capturing the Master of the Temple. A two-year truce followed.
The Kingdom still needed someone to marry Sibylla and so succeed to the Kingdom. Sibylla had fallen in love with a young adventurer named Guy of Lusignan and they were married on Easter 1180. Reynald of Châtillon supported Guy while Raymond of Tripoli had serious reservations, so Guy now fell into the factional fighting as well.
Despite the truce between Cairo and Jerusalem, Reynald of Châtillon in 1181 raided a rich caravan of pilgrims on their way to Mecca. The violation of the peace in the form of plundering pilgrims enraged Saladin and he vowed to put an end to the Franks. He set out with a large army on May 11, 1182. He never returned to Cairo.