On September 20, 1187, Saladin began the Siege of Jerusalem. From the article:
"Siege of Jerusalem Summary
In the wake of his victory at the Battle of Hattin in July 1187, Saladin conducted a successful campaign in the Christian territories of the Holy Land. Among those Christian nobles who managed to escape from Hattin was Balian of Ibelin who first fled to Tyre. A short time later, Balian approached Saladin to ask permission to pass through the lines to retrieve his wife, Maria Comnena, and their family from Jerusalem. Saladin granted this request in exchange for an oath that Balian would not take up arms against him and would only remain in the city for one day.
Traveling to Jerusalem, Balian was immediately summoned by Queen Sibylla and Patriarch Heraclius and asked to lead the defense of the city. Concerned about his oath to Saladin, he was ultimately convinced by Patriarch Heraclius who offered to absolve him of his responsibilities to the Muslim leader. To alert Saladin to his change of heart, Balian dispatched a deputation of burgesses to Ascalon. Arriving, they were asked to open negotiations for the surrender of the city. Refusing, they told Saladin of Balian's choice and departed.
Though angered by Balian's choice, Saladin did allow Maria and the family safe passage to travel to Tripoli. Within Jerusalem, Balian faced a bleak situation. In addition to laying in food, stores, and money, he created sixty new knights to reinforce its weak defenses. On September 20, 1187, Saladin arrived outside of the city with his army. Not wishing further bloodshed, Saladin immediately opened negotiations for a peaceful surrender. With Eastern Orthodox clergyman Yusuf Batit serving as a go-between, these talks proved fruitless.
With the talks ended, Saladin commenced a siege of the city. His initial attacks focused on the Tower of David and the Damascus Gate. Assaulting the walls over several days with a variety of siege engines, his men were repeatedly beaten back by Balian's forces. After six days of failed attacks, Saladin shifted his focus to a stretch of the city's wall near the Mount of Olives. This area lacked a gate and prevented Balian's men from sortieing against the attackers. For three days the wall was relentlessly pounded by mangonels and catapults. On September 29, it was mined and a section collapsed.
Attacking into the breach Saladin's men met fierce resistance from the Christian defenders. While Balian was able to prevent the Muslims from entering the city, he lacked the manpower to drive them from the breach. Seeing that the situation was hopeless, Balian rode out with an embassy to meet with Saladin. Talking with his adversary, Balian stated that he was willing to accept the negotiated surrender that Saladin had initially offered. Saladin refused as his men were in the middle of an assault. When this attack was repulsed, Saladin relented and agreed to a peaceful transition of power in the city.
Aftermath
With the fighting concluded, the two leaders began haggling over details such as ransoms. After extended discussions, Saladin stated that the ransom for Jerusalem's citizens would be set at ten bezants for men, five for women, and one for children. Those that could not pay would be sold into enslavement. Lacking money, Balian argued that this rate was too high. Saladin then offered a rate of 100,000 bezants for the entire population. Negotiations continued and finally, Saladin agreed to ransom 7,000 people for 30,000 bezants.
On October 2, 1187, Balian presented Saladin with the keys to the Tower of David completing the surrender. In an act of mercy, Saladin and many of his commanders freed many of those destined for enslavement. Balian and the other Christian nobles ransomed several others from their personal funds. The defeated Christians left the city in three columns, with the first two led by the Knights Templars and Hospitallers and the third by Balian and Patriarch Heraclius. Balian ultimately rejoined his family in Tripoli.
Taking control of the city, Saladin elected to permit the Christians to retain control of the Church of the Holy Sepulchre and allowed Christian pilgrimages. Unaware of the city's fall, Pope Gregory VIII issued a call for the Third Crusade on October 29. The focus of this crusade soon became the recapture of the city. Getting underway in 1189, this effort was led by King Richard of England, Philip II of France, and Holy Roman Emperor Frederick I Barbarossa."