After successfully driving the Germans away from Moscow, the soviet command attempted to take the strategic initiative. This involved beginning a major offensive on several sections of the front lines simultaneously. The Germans, however, having finally received reinforcements, managed to put together an equally strong force and decided to take advantage of the fact that the soviet army was widely dispersed.
The German Command decided to chose an area with the most favorable balance of forces for the counter-strike, Which meant Kharkov in the south Group's area, even though the Soviets were attacking here with particular energy. When the counter-strike began, the Red Army had already taken back the town of Izium and was advancing towards Kharkov. This advance produced a clearly defined wedge, and it was the right flank of this wedge that the Germans planned to strike at.
The operation named Frederic-1, pitted nearly equal armies, in terms of manpower and weaponry, against each other. But since the German were concentrating on the flank, and not the advancing Army, they managed to put together superior numbers, especially in tanks, for the actual strike.
Thy cut through the Soviet defenses and managed to get behind the advancing troops before they could retreat. The Soviet Command did not realize how serious the situation was until their army was completely surrounded.Only small group of Soviet troops managed to escape the German encirclement, leaving behind heavy weapons and machinery.They lost 267,000 crack troops and the way was open for broadening the German offensive. The south group now divided into A and B group and began their advance towards the Caucasus and Stalingrad.
During this time Rommel was advancing on the British in Africa and Americans stopped the Japanese in the Solomon islands and New guinea after the battle of the Coral Sea.