Events

• Saladin abolishes the Fatimid caliphate, restoring Sunni rule in Egypt.
• Manuel I Comnenus orders all the Venetians in the Byzantine Empire to be arrested and their property confiscated.
• Rhys ap Gruffydd agrees to negotiate with Henry II of England.
• Construction of the Cathedral of Saint Sabino in Bari is completed.
• Serbian ruler Stefan Nemanja begins his sole reign.
• Alfonso II of Aragon conquers Caspe and Teruel.
• Henry II of England, with the aid of the ousted King of the Irish province of Leinster, Diarmait MacMurrough, sponsors the Norman invasion of Ireland, sparking eight centuries of conflict and war between Ireland and England.

Births

• August 15 ? King Alfonso IX of Leon (d. 1230)
• Agnes of France, daughter of Louis VII of France (d. after 1207)

Deaths

• January 1 ? Diarmait Mac Murchada, King of Leinster (b. 1110)
• February 20 ? Conan IV, Duke of Brittany (b. 1138)
• November 8 ? Baldwin IV, Count of Hainaut (b. 1108)
• Henry of Blois, bishop of Winchester (b. 1111)
• Gleb of Kiev

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