The Italian army positioned well, set up effective fields of fire, maneuvered well, had successful local counter-attacks, and inflicted casualties commensurate with what they received.

The area east of the Jebel Akhdar mountains was garrisoned by XX Corps (Lieutenant-General Annibale Bergonzoli) with the 60th Infantry Division "Sabratha" and the Babini Group, which had 120 tanks.

[3] On 23 January, the newly promoted 10th Army commander, General Giuseppe Tellera ordered a counter-attack against the British, to avoid an envelopment of XX Corps from the south.

[4][5] On 25 January in the north, the 2/11th Australian Battalion engaged the "Sabratha" Division and the 10th Bersaglieri Regiment of the Babini Group at Derna airfield, making slow progress against determined resistance.

The group retreated south of Slonta to Bir Melez and Antelat, covering 140 mi (220 km) through sandstorms and air attacks, pursued by the 4th Armoured Brigade until it had to stop on the 28 January due to lack of fuel, exhaustion and the camel tracks turning to deep mud in the rains.

During the day, the 2/4th Australian Battalion in the Derna–Giovanni Berta area, attacked and cut the Derna–Mechili road and a company crossed Wadi Derna during the night against bold Italian counter-attacks.

The Italians disengaged on the night of 28/29 January, before the garrison was trapped; rearguards of the Babini Group cratered roads, planted mines and booby-traps and managed to conduct several skilful ambushes, which slowed the British pursuit.