modify it. On 2 May 1977 the court ruled that the islands and all adjacent formations belonged to Chile. See the Report and decision of the Court of Arbitration. In their only meeting in 1974 Juan Perón expressed his wishes to settle the conflict to Augusto Pinochet. On 25 January 1978 Argentina rejected the ruling, and attempted via military force to challenge the Chilean commitment to defend the territory, and to coerce Chile into negotiating a division of the islands that would produce a boundary consistent with Argentine claims. Direct negotiations (1977–1978) Direct negotiations between Chile and Argentina began after the announcement of the binding arbitration ruling, on 2 May 1977, and ended with the Act of Montevideo, Uruguay, on 9 January 1979, where both countries accepted papal mediation after Argentina aborted Operation Soberanía. In the interim, both countries deployed military forces, moving to the brink of open warfare in tandem with a frenzy of diplomatic activity. This was the most dangerous phase of the Beagle conflict; open warfare seemed a real possibility Operation Soberanía (1978) On 22 December 1978 Argentina initiated Operation Soberanía, an attempt via military force to occupy the islands around Cape Horn, intending to judge from Chile's response whether to advance further. However, the operation was aborted within a few hours. Instead of renewing the operation at the next window of opportunity, the junta in Buenos Aires decided to allow the Pope to mediate the dispute through the offices of Cardinal Antonio Samoré, his special envoy. Papal mediation (1979–1984) On 9 January 1979, the Act of Montevideo was signed pledging both sides to a peaceful solution and a return to the military situation of early 1977. The Pope proposed in 1980 a solution that was accepted by Chile and rejected by Argentina. The detention of alleged spies on both sides of the border, the following border closure by Argentina on 28 April 1981, and the Argentine repudiation of the General Treaty on the Judicial Settlement of Disputes in January 1982 maintained the danger of war. Six weeks before the Falklands War, Argentina provoked the ARA Gurruchaga incident with Chile at Deceit Island. The Falklands War (1982) Anglo-Chilean relations had been deteriorating since the Sheila Cassidy Affair in 1973. In 1982, Argentina went to war against the United Kingdom in the Falklands War. The Argentine plan included the military occupation of the disputed islands at the Beagle