German infantry and armoured vehicles battle the Soviet defenders on the streets of Kharkiv, October 1941. With the situation in Europe and Asia relatively stable, Germany, Japan, and the Soviet Union made preparations. With the Soviets wary of mounting tensions with Germany and the Japanese planning to take advantage of the European War by seizing resource-rich European possessions in Southeast Asia, the two powers signed the Soviet–Japanese Neutrality Pact in April 1941. By contrast, the Germans were steadily making preparations for an attack on the Soviet Union, amassing forces on the Soviet border. Hitler believed that Britain’s refusal to end the war was based on the hope that the United States and the Soviet Union would enter the war against Germany sooner or later. He accordingly decided to try to strengthen Germany’s relations with the Soviets, or failing that, to attack and eliminate them as a factor.
In November 1940 negotiations took place to determine if the Soviet Union would join the Tripartite Pact. The Soviets showed some interest, but asked for concessions from Finland, Bulgaria, Turkey, and Japan that Germany considered unacceptable. On 18 December 1940 Hitler issued the directive to prepare for an invasion of the Soviet Union. On 22 June 1941, Germany and Romania invaded the Soviet Union in Operation Barbarossa, with Germany accusing the Soviets of plotting against them. They were joined shortly by Finland and Hungary after Soviet aircraft bombed their territory. The primary targets of this surprise offensive were the Baltic region, Moscow and Ukraine, with the ultimate goal of ending the 1941 campaign near the Arkhangelsk-Astrakhan line, connecting the Caspian and White Seas.
Hitler’s objectives were to eliminate the Soviet Union as a military power, exterminate Communism, generate Lebensraum (“living space”) by dispossessing the native population and guarantee access to the strategic resources needed to defeat Germany’s remaining rivals. . Although the Red Army was preparing for strategic counter-offensives before the war, Barbarossa forced the Soviet supreme command to adopt a strategic defence. During the summer, the Axis made significant gains into Soviet territory, inflicting immense losses in both personnel and materiel. By the middle of August, however, the German Army High Command decided to suspend the offensive of a considerably depleted Army Group Centre, and to divert the 2nd Panzer Group to reinforce troops advancing towards central Ukraine and Leningrad. The Kiev offensive was overwhelmingly successful, resulting in encirclement and elimination of four Soviet armies, and made further advance into Crimea and industrially developed Eastern Ukraine (the First Battle of Kharkov) possible.
Soviet counter-attack during the battle of Moscow, December 1941. The diversion of three quarters of the Axis troops and the majority of their air forces from France and the central Mediterranean to the Eastern Front prompted Britain to reconsider its grand strategy. In July, the UK and the Soviet Union formed a military alliance against Germany The British and Soviets invaded Iran to secure the Persian Corridor and Iran’s oil fields. In August, the United Kingdom and the United States jointly issued the Atlantic Charter.
 By October, when Axis operational objectives in Ukraine and the Baltic region were achieved, with only the sieges of Leningrad and Sevastopol continuing, a major offensive against Moscow had been renewed. After two months of fierce battles, the German army almost reached the outer suburbs of Moscow, where the exhausted troops were forced to suspend their offensive. Large territorial gains were made by Axis forces, but their campaign had failed to achieve its main objectives: two key cities remained in Soviet hands, the Soviet capability to resist was not broken, and the Soviet Union retained a considerable part of its military potential. The blitzkrieg phase of the war in Europe had ended.
By early December, freshly mobilised reserves allowed the Soviets to achieve numerical parity with Axis troops. This, as well as intelligence data that established a minimal number of Soviet troops in the East sufficient to prevent any attack by the Japanese Kwantung Army, allowed the Soviets to begin a massive counter-offensive that started on 5 December all along the front and pushed German troops 100–250 kilometres (62–160 mi) west.