Anwar Sadat's 1971 "offer" of a peace treaty in exchange for Israel turning over the Sinai Peninsula, which it captured in the June 1967 war, was far more of a threat to attack Israel if it didn't "return" all lands seized by the Israelis in that earlier conflict. It was only one of several such threats Sadat would make against Israel over the next several years, culminating in the surprise attack by Egypt and Syria while Israeli's were celebrating their holiest day of the year, the Day of Redemption.
Israel was formally declared a State in 1948 following a vote by the United Nations. At that time, the newly established State of Israel was to be considerably smaller than it currently is, and would exist side-by-side with a Palestinian State. Rather than acquiesce in the establishment of a Jewish state, however, the U.N. vote was immediately followed by an attack on Israel by all of the Arab states surrounding it. Following what the Israelis call their war of independence, the Jewish state now incorporated territories that had been planned for the Palestinian State.
In 1967, with Arab armies maneuvering for a planned attack on Israel, spurred on by threatening rhetoric of Egyptian President Gamal Abdul Nasser, and Nasser's decision to impose a blockade on Israel by closing the Suez Canal and Straits of Tiran, the Israelis decided to strike first, initiating a series of air strikes and ground attacks that resulted in the rapid defeat of the armies of Egypt, Jordan and Syria, and the Palestine Liberation Organization, which had been formed in 1963 to launch attacks on Israeli farms and villages. When the 1967 war was over, Israel was in control of the Sinai Peninsula (Egypt), the Golan Heights (Syrian), and the regions of Judea and Samaria, or the West Bank,depending on your perspective (Jordanian/Palestinian).
Following a period of unceasing terrorist attacks and special operations involving the Palestinians, Eyptians and Israelis, known as "the War of Attrition," new Egyptian President Anwar Sadat issued a series of threats to retake the Sinai Peninsula. In the fall of 1973, the Egyptian and Syrian Armies undertook a series of military operations designed to make the Israelis think an attack was imminent. After responding to a number of false starts, in which the Arab attack did not materialize, the Israelis relaxed and focused on observing their holiest days of the year, capped by Yom Kippur. They were then caught by surprise when Egypt and Syria did attack during Yom Kippur.
Israel regrouped following heavy losses and launched counter-attacks that pushed the Egyptian Army back out of the Sinai. Israel was on the verge of crossing the Suez and encircling the Egyptian Third Army, when U.S. and Soviet intervention -- and the Soviet Union had been threatening to attack Israel if it did not cease operations, brought the fighting to a halt.
Egypt was badly defeated in the Yom Kippur War. Its defeat, however, convinced Sadat that his and his country's interests were better served by negotiating a peace treaty with Israel -- what would become the Camp David Peace Accords of 1978, under the terms of which Israel returned the Sinai Peninsula to Egypt.
The Arab-Israeli War, also called the Yom Kippur war on account of it commencing on the sacred Jewish holiday of Yom Kippur, was fought between Egypt and Israel over land.
During the six day war of 1967, Israel took Sinai Peninsula and Golan Heights from Egypt and Syria respectively. Later that year a secret decision was made by the Israeli government to return the land in exchange for a peace agreement and demilitarization of Golan Heights; however, this decision was never communicated to the Egyptian government and was withdrawn near the end of 1967.
In 1971 Sadat succeeded the then deceased Nasser as president of Egypt. He proposed a peace treaty with Israeli that stated the conflict would cease if Israel returned the land and the borders between the two countries went back to pre-1967 lines. Israel refused.
In response, Sadat declared that the Egyptian people were willing to lose millions in order to take back what was theirs. Israel was complacent and never launched the preemptive attack they promised they would if war was imminent. On Yom Kippur Egyptian forces launched a surprise attack on Israeli forces in the Sinai.