In early 1921, Spanish forces commanded by General Manuel Fernández Silvestre started an offensive into northeastern Morocco from the coastal regions that they already held.

The outposts were widely spread, typically located in high places, distant from water sources and lacking good communications with the main positions.

[8] The ultimate goal of the campaign was to establish a permanent military presence on the shores of Al Hoceima bay, a strategic point between the western and the eastern Moroccan coast.

[9] The Rifian irregular forces were commanded by Muhammad Ibn 'Abd al-Karim al-Khattabi (usually known as Abd el Krim), a former civil servant and translator in the Spanish Office of Indigenous Affairs in Melilla and one of the leaders of the tribe of the Aith Ouriaghel.

[10] On 15 January 1921 the Spanish forces under Silvestre occupied the small village of Annual in the valley of Beni Ulicheck, and established their main forward base for completing the occupation of eastern Morocco.

[12] On 1 June 1921, a Spanish outpost set up just hours before on Mount Abarrán [es], a 525-metre-high (1,722 ft) position east of Annual, was attacked and captured by Rifian guerrillas.

[8] With ammunition low and the support base at Igueriben already overrun, General Silvestre, who had arrived at Annual only the day before, decided upon a withdrawal along the line of the previous Spanish advance.

At about 10 a.m., the garrison began to march in column from the encampment in the direction of Melilla,[15] but poor leadership and inadequate preparation meant that any hope of a disciplined withdrawal quickly degenerated into a disorganised rout.

[8] Hitherto reliable Moroccan regulares, native police and tribal allies deserted to the Rifian forces, depriving the Spanish column of flankers and rear guard.

[11] According to one report, Spanish sergeant Francisco Basallo Becerra from the Kandoussi garrison, an outpost east of Annual,[18] identified the remains of Silvestre by his general's sash.

Spanish survivors of the battle retreated some 80 kilometres (50 mi) to the spread-out fortified base of Monte Arruit, which was built between 1912 and 1916 and located south of Melilla.

[11] Materiel lost by the Spanish, in the summer of 1921 and especially in the Battle of Annual, included 11,000 rifles, 3,000 carbines, 1,000 muskets, 60 machine guns, 2,000 horses, 1,500 mules, 100 cannons, and a large quantity of ammunition.

[30][31] The reasons for the crushing defeat may lie with Silvestre's tactical decisions and the fact that the bulk of the Spanish army was formed by poorly trained conscripts.

[22] Popular opinion widely placed the blame for the disaster upon King Alfonso XIII, who, according to several sources, had encouraged Silvestre's irresponsible penetration to positions far from Melilla without having adequate defenses in his rear.

The last Spanish military commander to mount any significant resistance during the battle was the General Felipe Navarro who was forced to surrender and was captured along with 534 military personnel and 53 civilians, all of whom were held by Abd-el-Krim at his headquarters in Axdir; of these, 326 survived the 18 months of captivity before eventually being released following negotiations undertaken primarily by members of the Indigenous Affairs Delegation, most prominently Gustavo de Sostoa and Luis de la Corte Luján, with the final conditions settled between Abd el-Krim himself and Horacio Echevarrieta.

[33] On 2 July 2012, the cavalry regiment Cazadores de Alcántara was awarded the Laureate Cross of Saint Ferdinand by the Council of Ministers for its rearguard action in Annual.