After the capture of Finschhafen, the Japanese forces in the area withdrew towards Sattelberg where they sought to hold the Australians before launching a counteroffensive, which subsequently threatened the landing beach.

Finschhafen had been occupied by the Imperial Japanese Army on 10 March 1942 as part of strategic moves to provide protection to Lae, which they had established as an important air base.

[2] Yamada's forces were spread out in a series of outposts that were orientated around a main defensive position established at Sattelberg, an abandoned Lutheran mission situated atop a 975-metre (3,199 ft) mountain that dominated the terrain about 12 kilometres (7.5 mi) north-west of Finschhafen.

They were low on ammunition for all calibres of weapons, especially artillery, and the majority of stores had to be carried by combat troops, as local carriers had ceased working for the Japanese in response to Allied propaganda.

[15] The following day, 23 September, the 20th Brigade's drive on Finschhafen began,[16] with two battalions commencing the advance south – the 2/13th and 2/15th supported by the 2/12th Field Regiment as well as engineers from the 2/3rd Field Company  – while the 2/17th was split up, with two companies advancing as part of the brigade's reserve, while another remained to secure the beachhead from a Japanese attack and push it further to the north,[10] and the fourth pushed towards Sattelberg.

To traverse the ground, the Australians had only limited vehicles, with each infantry battalion possessing four jeeps with trailers for resupply, while the engineers and artillery had several trucks and tractors.

[26] Due to concerns about their western flank,[27] the 2/17th extended the Australian perimeter towards Jivevaneng, establishing a company there, but it subsequently came under attack on the Sattelberg Road and west of Katika on 25 and 26 September from the Japanese 80th Infantry Regiment, which was trying to break through to the Heldsbach Plantation on the coast.

On 1 October, they crossed the Mape River adjacent to Langemak Bay, while the forward troops from the 20th Infantry Brigade, overwhelmed a Japanese force around Kakakog, supported by artillery and air power, killing between 80 and 100 defenders.

[36] Following the capture of Finschhafen, the main part of the Australian 20th Infantry Brigade returned to Scarlet Beach, due to intelligence that the Japanese were about to attack.

[26] Around Jivevaneng, 5 kilometres (3.1 mi) east of Sattelberg, the 2/43rd had taken up a blocking position and in the early days of October fought a Japanese attack by a battalion from the 80th Infantry Regiment along the coast road to a halt.

[37] In an effort to shore up their western flank, the Australian 2/17th Infantry Battalion pressed towards Kumawa, which was met with a fierce response from the Japanese on 5 October when their line of communication from the west was threatened.

[38] The battalion continued to fight around Jivevaneng, and on 10 October they secured a piece of high ground called the "Knoll" by the Australians, who subsequently defeated 12 attacks to take it back.

[39] On 10/11 October, as it became apparent to the Allies that Japanese were preparing for a major assault, Wootten and his headquarters landed at Finschhafen, along with the remainder of Brigadier Bernard Evans' 24th Infantry Brigade.

As troops from the 20th Infantry Brigade attempted to push towards Sattelberg, the 24th began patrol actions towards Bonga; during one of these patrols, the Allies gained a significant intelligence boon when they discovered a Japanese briefcase containing an operational order detailing plans for a coming counterattack; in addition, the Allies intercepted several Japanese radio transmissions, and deduced their intentions based upon reports of troop and ship movements.

One of the .50 calibre machine guns, manned by Private Nathan van Noy, assisted by Corporal Stephen Popa, engaged a group of Japanese led by a bugler and two men with flame-throwers.

A Japanese hand grenade landed in their weapon pit, shattering one of van Noy's legs and wounding Popa, but they continued to fire.

[46] The Australians managed to hold key terrain around Jivevaneng and Katika from where the Allies employed their direct and indirect fire support to inflict heavy casualties.

[51] Fierce resistance from the 2/28th halted them and eventually the attack was called off on 24 October, with the Japanese having suffered heavily due to tactical deficiencies, poor co-ordination and operational security, and a lack of artillery.

[55][56] Supplies were landed by US troops from the 532nd Engineer Boat and Shore Regiment, and then brought up and cached around Jivevaneng and Kumawa,[57] but heavy rain hampered the Australian efforts until mid-November.

[58] The Australians subsequently were able to reduce and then secure the Japanese strong hold around Sattelberg against determined resistance following a hard slog through dense jungle, working in concert with the Matilda tanks.

At the same time, once Sattelberg was secured, a simultaneous drive was undertaken to clear the Wareo plateau, which provided good observation towards Scarlet Beach as well as serving as a junction for Japanese lines of communication south.