In early May 1942, Japan initiated operations to capture Port Moresby by amphibious assault and thus sever communications and supply lines between the United States and Australia. The Allies, however, intercepted and turned back Japanese naval forces, successfully preventing the invasion. Japan's next plan, motivated by the earlier bombing on Tokyo, was to seize Midway Atoll and lure American carriers into battle to be eliminated; as a diversion, Japan would also send forces to occupy the Aleutian Islands in Alaska. In early June, Japan put its operations into action but the Americans, having broken Japanese naval codes in late May, were fully aware of the plans and force dispositions and used this knowledge to achieve a decisive victory at Midway over the Imperial Japanese Navy.
With its capacity for aggressive action greatly diminished as a result of the Midway battle, Japan chose to focus on a belated attempt to capture Port Moresby by an overland campaign in the Territory of Papua. The Americans planned a counter-attack against Japanese positions in the southern Solomon Islands, primarily Guadalcanal, as a first step towards capturing Rabaul, the main Japanese base in Southeast Asia.
Both plans started in July, but by mid-September, the battle for Guadalcanal took priority for the Japanese, and troops in New Guinea were ordered to withdraw from the Port Moresby area to the northern part of the island, where they faced Australian and United States troops in the Battle of Buna-Gona. Guadalcanal soon became a focal point for both sides with heavy commitments of troops and ships in the battle for Guadalcanal. By the start of 1943, the Japanese were defeated on the island and withdrew their troops. In Burma, Commonwealth forces mounted two operations. The first, an offensive into the Arakan region in late 1942, went disastrously, forcing a retreat back to India by May 1943. The second was the insertion of irregular forces behind Japanese front-lines in February which, by the end of April, had achieved dubious results.
On Germany's eastern front, the Axis defeated Soviet offensives in the Kerch Peninsula and at Kharkov, and then launched their main summer offensive against southern Russia in June 1942, to seize the oil fields of the Caucasus and occupy Kubansteppe, while maintaining positions on the northern and central areas of the front. The Germans split the Army Group South into two groups: Army Group A struck lower Don River while Army Group B struck south-east to the Caucasus, towards Volga River. The Soviets decided to make their stand at Stalingrad, which was in the path of the advancing German armies.
By mid-November the Germans had nearly taken Stalingrad in bitter street fighting when the Soviets began their second winter counter-offensive, starting with anencirclement of German forces at Stalingrad and an assault on the Rzhev salient near Moscow, though the latter failed disastrously. By early February 1943, the German Army had taken tremendous losses; German troops at Stalingrad had been forced to surrender and the front-line had been pushed back beyond its position before the summer offensive. In mid-February, after the Soviet push had tapered off, the Germans launched another attack on Kharkov, creating a salient in their front line around the Russian city of Kursk.
By November 1941, Commonwealth forces had launched a counter-offensive, Operation Crusader, in North Africa, and reclaimed all the gains the Germans and Italians had made. In the West, concerns the Japanese might utilize bases in Vichy-held Madagascar caused the British to invade the island in early May 1942. This success was offset soon after by an Axis offensive in Libya which pushed the Allies back into Egypt until Axis forces were stopped at El Alamein. On the Continent, raids of Allied commandos on strategic targets, culminating in the disastrous Dieppe Raid, demonstrated the Western Allies' inability to launch an invasion of continental Europe without much better preparation, equipment, and operational security.
In August 1942, the Allies succeeded in repelling a second attack against El Alamein and, at a high cost, managed to deliver desperately needed supplies to the besieged Malta. A few months later, the Allies commenced an attack of their own in Egypt, dislodging the Axis forces and beginning a drive west across Libya. This attack was followed up shortly after by an Anglo-American invasion of French North Africa, which resulted in the region joining the Allies. Hitler responded to the French colony's defection by ordering the occupation of Vichy France; although Vichy forces did not resist this violation of the armistice, they managed to scuttle their fleet to prevent its capture by German forces. The now pincered Axis forces in Africa withdrew into Tunisia, which was conquered by the Allies in May 1943.