Balian bargained with Saladin to buy safe passage for many, and the city was peacefully surrendered with limited bloodshed.

Latin Christians responded in 1189 by launching the Third Crusade led by Richard the Lionheart, Philip Augustus, and Frederick Barbarossa separately.

[1] In Jerusalem, Saladin restored Muslim holy sites and generally showed tolerance towards Christians; he allowed Orthodox and Eastern Christian pilgrims to visit the holy sites freely—though Frankish (i.e. Catholic) pilgrims were required to pay a fee for entry.

The survivors of the battle and other refugees fled to Tyre, the only city able to hold out against Saladin, due to the fortuitous arrival of Conrad of Montferrat.

As the highest-ranking lord remaining in Jerusalem, according to the chronicler Ibn al-Athir, Balian was seen by the Muslims as holding a rank "more or less equal to that of a king.

The armies of Syria and Egypt assembled under Saladin, and after conquering Acre, Jaffa, and Caesarea (though he unsuccessfully besieged Tyre), the sultan arrived outside Jerusalem on September 20.

On September 26, Saladin moved his camp to a different part of the city, on the Mount of Olives where there was no major gate from which the crusaders could counter-attack.

The walls were constantly pounded by the siege engines, catapults, mangonels, petraries, Greek fire, crossbows, and arrows.

The crusaders were unable to push Saladin's troops back from the breach, but at the same time, the Muslims could not gain entrance to the city.

Soon there were only a few dozen knights and a handful of remaining men-at-arms defending the wall, as no more men could be found even for the promise of an enormous fee.

At Mount Calvary, women cropped their children's hair, after immersing them chin-deep in basins of cold water.

Saladin also granted Sibylla safe passage to visit her captive husband, King Guy, in Nablus.

Saladin then proceeded to free 1,000 more captives upon request of Muzaffar al-Din Ibn Ali Kuchuk, who claimed they were from his hometown of Urfa.

The remaining refugees fled from Ascalon to Alexandria, where they were housed in makeshift stockades and received hospitable treatment from the city officials and elders.

The governor of Alexandria, who had earlier taken the oars of the ships for payment of taxes, refused to grant sailing permits to the captains until they agreed.

Saladin ultimately decided not to destroy the church, saying that he had no intention to discourage Christian pilgrimages to the site; it was reopened after three days on his orders.

To solidify Muslim claims to Jerusalem, many holy sites, including the shrine known as Al-Aqsa, were ritually purified with rose water.

[16][17] Saladin went on to capture a number of other castles that were still holding out against him, including Belvoir, Kerak, and Montreal, and returned to Tyre to besiege it for a second time.

[18] Meanwhile, news of the disastrous defeat at Hattin was brought to Europe by Joscius, Archbishop of Tyre, as well as other pilgrims and travellers, while Saladin was conquering the rest of the kingdom throughout the summer of 1187.

Plans were immediately made for a new crusade; on October 29, Pope Gregory VIII issued the bull Audita tremendi, even before hearing of the fall of Jerusalem.

The Third Crusade did not get underway until 1189, in three separate contingents led by Richard I of England, Philip II of France, and Frederick I, Holy Roman Emperor.