Having spent the month recouping from the defeat of the First Battle of el-Alamein, Rommel had received limited re-supply -- bringing his strength up to 200 German and 243 Italian tanks. Only 26 of the German tanks were the new Panzer Mark IV Specials (the F2, with a long 75 mm gun), another ten were the older Mark IV's (F1 with a short-barrel gun), and the majority Mark IIIs. The Italian tanks were mostly M13/40s, which were under gunned and under armored for the level of aggression at this stage in the war.
Lieutenant-General Bernard Law Montgommery, who had been appointed Commander Eighth Army at the beginning of the month, was 'sitting pretty'. He had ordered the development of extensive defenses, including an estimated 15 000 mines and booby traps. His troops were refreshed and in high spirits, and he had roughly 700 tanks available.
Rommel looked to repeat his tactics from Gazala, making a night attack late on 30 August 1942 through the British southern flank and move 30 miles east past the ridge at Alam Halfa and then north to the rear of the British Eight Army position. The attack needed speed and surprise, and to provide the latter Rommel had diversionary attacks planned for Italian infantry against Australian forces at the coast and Indian troops on Ruweisat Ridge.
Montgommery responded by ordering the desert lit up with parachute flares; Rommel's tanks were slowed to a crawl through the British minefields and subjected to heavy air and artillery bombardment. The tanks of the 21st Panzer Division finally broke through the minefield at 4:30 on the morning of the 31st, but all hope of surprise was lost. Rommel, fluid in his planning as ever, made the Alam Halfa ridge the new prime objective for the attack, but progress continued to be slow.
When the Panzer regiments reached the ridge of Alam el Halfa they were met with overwhelming force. The British Eight Army fought tenaciously, the dug-in anti-tank guns and hull-down tanks decimated the German forces. Caught in a well prepared killing ground, Rommel had no alternative but to give the order to withdraw on 2 September. Rommel's Afrika Korps had reached their furthest point east in the campaign for North Africa.