The Khmer-Cham war begun by Cham king Jaya Indravarman IV continues, with neither side making serious gains until 1171, when the Chams, who had learned from a shipwrecked Chinese mandarin the battle advantages in using horses instead of elephants, gain an important victory over the Khmers.

The Greeks, resentful of the increasing presence in Constantinople of Venetian merchants and the privileges accorded them following the two Crusades, entreat the emperor to act against them.

Following an anti-Latin demonstration in Constantinople in 1171, the emperor, to maintain order in his dominions, and egged on by Genoa, Pisa, and other of the Venetians' trading rivals, in a single day arrests all Venetian residents in Constantinople and the provinces and briefly confiscates their goods.

The Fatimids, Ismaili Shi’tes, had honored philosophical studies at a time when rulers in other countries declared philosophers as apostates or heretics.

The Fatimids had encouraged the study of Greek philosophy, giving support to scholars of any branch of philosophy.

The Fatimid Caliphs had invited numerous scholars from neighboring realms and collected textbooks on various branches of knowledge.

These will be destroyed by Saladin along with the Fatimids.

Saladin, The founder of the staunchly Sunni Ayyubid Dynasty, converts Al-Azhar University to a Shafi'ite Sunni center of learning.

Abd-el-latif delivers lectures on Islamic medicine at Al-Azhar; Maimonides delivers lectures on medicine and astronomy.

Saladin obeys Nur ad-Din's order in 1171 to have the prayers in the mosques mention the Caliph of Baghdad instead of the Caliph of Cairo, who is now in his final illness.

Thus ends the weak and unpopular Shi'ite Fatimid caliphate and the great division in Levantine Islam from which the Latins had profited.

Saladin becomes Egypt's sole ruler, returning Egypt to official Sunni orthodoxy (despite the religious unorthodoxy of the Ismaili Fatimids, most of the dynasty’s subjects have remained orthodox Muslims).

Although non-Muslms are again subject to discrimination, Jewish intellectual life flourishes under Ayubbid rule with more than seven thousand Jewish families in Egypt, among them that of Maimonides, whose fame as a physician has spread rapidly; he soon becomes the court physician to Saladin.

Emperor Manuel, in prosecuting the war with Venice that began in 1170, seizes Venetian outposts in the Aegean: …

…other Venetian holdings in the Adriatic fall to Hungary's Stephen III, who advances with his troops along the Dalmatian coast.

The Venetians, who break relations with Constantinople in 1171, will not forget this episode.

They, too, begin to think in terms of putting Constantinople under Western control as the only means of securing their interest in Greek trade.

Bologna had begun in the eleventh century to aspire to being a free commune, which it had been able to do when Matilda of Tuscany died, in 1115, and the following year the city had obtained many judicial and economic concessions from Henry V. Bologna had joined the Lombard League against Frederick Barbarossa in 1164.

In one of the few instances of persecution of Italian Jews during this age, the city expels its Jews in 1171.