Very quickly after taking control Sadat reversed the major policies of the Nasser regime. He eliminated from high governmental positions Nasser's political supporters and instituted a free market economic policy to welcome foreign investment and trade. He also expelled all Soviet military and economic advisers in a direct appeal for friendship with the United States and the West.
Moreover, Sadat crafted a military strategy aimed at forcing the Israeli government to return the Sinai. He launched a surprise attack in October, 1973, against Israeli forces on the east side of the Suez Canal and gained a foothold in the Sinai before a U. S.-brokered cease-fire took effect. The next few years saw increasingly frustrating negotiations with Israel but closer ties between Egypt and the United States.
In another surprise move Sadat flew to Jerusalem in November, 1977, and addressed the Israeli Knesset. He was the first Arab leader to do so. This extraordinary gesture was followed by a successful mediation effort by U. S. president Jimmy Carter, the signing of the Camp David Accords in September, 1978, and an Egyptian-Israeli Peace Treaty in March, 1979.
Sadat's successes on the international scene were not rewarded by high popularity among Egyptians or the other Arab nations. His economic policies caused unemployment and severe inflation that were especially hard on the poor. A rise in bread prices in January, 1978, led to serious riots in Cairo and other urban areas. At the same time, Sadat was also radically changing the political structure. He legalized political parties after twenty years of one-party rule and permitted more freedom for journalists and newspapers to engage in political debate and criticism. He proposed new laws governing personal family life that altered traditional Islamic values, making them more consistent with Western lifestyles. These changes brought civil unrest and opposition to Sadat's rule, especially from the militant Muslim Brotherhood.
Throughout 1980 and 1981 the Sadat regime regularly arrested political activists from the left (the Communist Party), the religious right (the Muslim Brotherhood), and the center (the new Wafd Party ) in order to control the constant criticism of Sadat's policies. There were massive arrests in September, 1981, that swept up leading journalists as well as political dissidents. On October 6, 1981, Islamic militants assassinated Sadat as he watched a military parade in honor of the 1973 war.