In 1918, the final year of the War, the Austro-Hungarian monarchy was suffering from an internal crisis accompanied by unrest amongst the multiple Slavic peoples within its borders.

[4] The South Slavic peoples were divided between various subdivisions of the monarchy: Activities of the pro-Yugoslav forces in the Transleithanian Kingdom of Croatia-Slavonia on 30 May 1917 resulted in adoption of the May Declaration by the Yugoslav Club, a group of Croatian and Slovene deputies in the Reichsrat (the legislature of Cisleithania in Vienna).

The Declaration sought the unification of all the lands in the Habsburg monarchy populated by Slovenes, Croats, and Serbs in one independent entity.

The meeting produced the Zagreb Resolution that proclaimed the unity of the people of Slovenes, Croats and Serbs (a "unified nation" with the latter described as equal "tribes" whose peculiar historical positions and desires are to be accommodated), demanded a right of self-determination and possession of the territory they occupied, including the whole of Cisleithania.

[10] The People's Council (Serbo-Croatian: Narodno vijeće, Slovene: Narodni svet) was established on 5–8 October 1918 in Zagreb, pursuant to the decisions reached in March 1918.

The Council declared itself a political representative body of Slovenes, Croats and Serbs living in Croatia-Slavonia, Fiume, Dalmatia, Bosnia and Herzegovina, Istria, Trieste, Carniola, Gorizia and Gradisca, Styria, Carinthia, Bačka, Banat, Baranya, Međimurje and elsewhere in southwest Hungary.

Pavelić and others started negotiating with the Serbian envoy to the National Assembly Dušan T. Simović as soon as Simović had said that their military victory and the treaty with Hungary gave them right to most of the territory of the State of Slovenes, Croats and Serbs, whereas Pavelić said that they want unification with Serbia, but that they needed a federal state as well as a delineation of Croatian and Serbian population that would assume a population transfer.

Two days later, Emperor Karl issued a proclamation ("Imperial Manifesto of 16 October 1918"), which envisaged a significant modification the structure of the Empire by granting wide autonomy to its peoples, including federalization of Cisleithania.

On 19 October, the National Council of Slovenes, Croats and Serbs declared itself the supreme representative body of all South-Slavic peoples in the monarchy.

On 28 October, Gyula Andrássy the Younger sent a peace note to the American government while the Ban of Croatia, Antun Mihalović, reported to the Emperor and was dismissed with the instruction "Do as you please".

Those representing the Serbs in Vojvodina, however – including those in Banat, Bačka and Baranja – objected and formed their own administration under the supreme authority of the Serbian National Board in Novi Sad.

One day earlier, on 24 November 1918, the region of Syrmia, which had become part of the State of Slovenes, Croats and Serbs, seceded and also joined the Kingdom of Serbia.

[6] Stjepan Radić's Peasant Party participated in the National Council, but after it decided to merge with Serbia, they started to back off, calling the move foolish, and disputing the decision based on the fact that the Croatian Parliament never explicitly approved it.