Saitama Ghetto Ambush

Background
After the death of Prince Clovis, Cornelia was made the new viceroy of Area 11. Her main priority, upon arrival, was to locate Zero and exact revenge for the murder of her brother. In order to accomplish her goal she began a campaign to search for him and destroy any other terrorist factions. After unsuccessfully searching for him amongst the Blood of the Samurai she decided to recreate similar conditions as those of the Skirmish in Shinjuku Ghetto in order to draw Zero out. She even went as far as to publicly announce the starting time of the battle.

The Battle
The battle begins with an order from Andreas Darlton to commence the operation. Most of the forces move in, killing many civilians. Jeremiah Gottwald, Villetta Nu, and their squad have to stay behind as the Orange Incident is still fresh in everyone's minds and they do not trust Jeremiah.

At the same time, Lelouch has disguised himself as a Britannian soldier. When a Sutherland comes to question him about his identity, Lelouch calls himself Dario Torres and says he has an item recovered from the terrorists. The pilot steps out to retrieve the item and Lelouch uses his Geass to claim his Knightmare Frame.

Lelouch then manages to get in contact with the Yamato Alliance and he explains that he is Zero and assures them that they will win if they follow him. Using his superior battle tactics he is able to predict the movements of the Britannians and destroys a few Knightmares and tanks. He even goes so far as to destroy a bridge to wipe out more enemy units.

In the G-1 base, things seem to be going poorly as more and more of their forces are being ambushed and eliminated. Cornelia decides that enough damage has happened and orders all troops to fall back acknowledging that she can't win this fight if she maintains the course.

Lelouch decides to blend in with the retreat and fall back to the G-1 Base in order to get closer to Cornelia. As the retreat continues both Lelouch and Cornelia feel confident they will win.

Lelouch decides that there are too many enemies to effectively use his Geass and decides to setup a decoy by having one of the terrorists engage their IFF tag. Cornelia anticipates this and sends out her personal guard. They readily destroy the single Sutherland. The two battle in a war of wits as each tries to anticipate each other's moves. Unfortunately for Lelouch, the terrorists he was working with lose heart and begin to abandon their positions and ignore his orders. Some even attempt to surrender to the Britannians and are killed for the attempt. With that, Cornelia has won.

Lelouch is still deep in enemy lines and has no way of escaping when Cornelia orders each Sutherland to open their hatch and reveal themselves. Just as they are about to force Lelouch to revel himself, C.C. dressed as Zero appears and diverts their attention. As they decide whether or not to pursue Zero, Lelouch manages to slip away and escape.

Aftermath
Besides the complete destruction of the Yamato Alliance, the main result of this skirmish is the decision made by Lelouch to build his own army. This skirmish highlighted the need for a force that wouldn't buckle in the face of an army whose commander carried a lot of respect from the men she led. The lack of his own "heavy hitters" to deal with Cornelia's Royal Guard was one of the factors that led to a near disaster for Lelouch. In his words, "I'll raise an army that can't lose to Britannia. A people; a nation!" Before this point, Lelouch had actually considered breaking his ties with Ohgi and the other terrorists but he now gains the motivation to create the Black Knights.