Allies underestimated the Japanese determination to build up a large force at Buna and push overland to Port Moresby. Brig. Gen. Charles A. Willoughby, MacArthur's intelligence chief, repeatedly discounted an enemy attack through the mountains because of the difficult terrain and climate. As a result, the Allies continued reinforcing small units on the trail, and the enemy continued overrunning them.
With the Japanese well established at Buna and Kokoda, SWPA reorganized to counterattack on two fronts: along the Kokoda Trail and 200 miles east at Milne Bay. Three Australian brigades with American reinforcements strengthened the two fronts. At Milne Bay the Allies assembled a force of some 7,500 troops, including three companies of U.S. engineers and a battery of U.S. airborne antiaircraft artillery. Named Milne Force, this two-brigade concentration took positions around two Allied airfields. On the night of 25–26 August the Japanese landed 1,500 men six miles east of the airfields. Spearheaded by two light tanks, the Japanese mounted night assaults on the 26th and 27th, and reached Airstrip No. 3. Milne Force stiffened its line and then pushed the enemy into a general retreat. On 4 September the Japanese called in the Navy for evacuation. In this first Allied ground victory—and first significant American action in Papua—Milne Force killed 600 of the enemy, while losing 322 dead and 200 wounded.
Along the Kokoda Trail the Allies found a different situation. Instead of continuing their drive toward the certain capture of Port Moresby, the Japanese stopped at the village of Ioribaiwa, thirty miles short of their objective. Surprised at the sudden halt, the Allies soon learned that the Japanese agreed with their own strategic view: that success on New Guinea was directly related to success on Guadalcanal. The Japanese drive against the U.S. Marine beachhead in the Solomons had been repulsed, and on 18 September General Horii received orders to withdraw to Buna for a possible reinforcement of the Imperial Japanese Army forces on Guadalcanal. Once again the enemy had given the Allies time to regroup.
General MacArthur took advantage of the victory at Milne Bay and the enemy withdrawal from the Kokoda Trail to draw up a comprehensive plan to clear New Guinea of the enemy. SWPA's 1 October plan called for a series of sweeps and envelopments along three axes of advance that would position Allied forces for an attack on Buna in mid-November. On the first axis, the 7th Australian Infantry Division would move up the main trail from Port Moresby, cross the Owen Stanley Range through Kokoda, and occupy Wairopi, only twenty-five miles from Buna. On the second axis, the American 2d
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