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Events

• May 1 — Battle of Cresson: Saladin defeats the crusaders.
• July 4 — Battle of Hattin: Saladin defeats Guy of Lusignan, King of Jerusalem.
• September 20 — October 2 — Siege of Jerusalem: Saladin captures Jerusalem.
• October 21 — Pope Gregory VIII succeeds Pope Urban III as the 173rd pope.
• October 29 — Pope Gregory VIII issues the bull Audita tremendi, proposing the Third Crusade.
• December 19 — Pope Clement III succeeds Pope Gregory VIII as the 174th pope.
• Alexius Branas attempts to seize Constantinople in defiance of his master Isaac II Angelus.
• The Cathedral of St. Jacob is consecrated in Szczecin, Pomerania.
• Estonians, Curonians and Karelians destroy Sigtuna and kill the archbishop.
• Knut Eriksson builds a castle in the island of Stockholm.
• The Toltecs are deposed at Chichen Itza.
• Zen Buddhism comes to Japan.
• King Jayavarman VII of Ankor Vat defeats the Cham conquerors.
• Ghorin Muhammed conquers Punjab.
• Genoa takes Bonifacio (in Corsica) from Pisa.
• Glanvill, an official of King Henry II, describes how villeins can be free (approximate date).

Births

• September 5 — King Louis VIII of France (d. 1226)
• Arthur I, Duke of Brittany (d. 1203)
• Vladimir III Rurikovich, Grand Prince of Kiev (d. 1239)

Deaths

• July 4 — Raynald of Chatillon, Prince of Antioch (executed) (b. c. 1125)
• October 19 — Pope Urban III
• November 9 — Emperor Gaozong of China (b. 1107)
• December 17 — Pope Gregory VIII (b. c. 1100)
• Gerard of Cremona, Italian translator of scientific works (b. c. 1114)
• Roger de Moulins, Grand Master of the Knights Hospitaller
• Count Raymond III of Tripoli (b. 1140)