Events

• Saladin abolishes the Fatimid caliphate, restoring Sunni rule in Egypt.
• The Lord Rhys agrees to negotiate with Henry II of England.
• Construction of the Cathedral of Saint Sabino in Bari is completed.
• Serbian ruler Stefan Nemanja begins sole reign.
• Alfonso II of Aragon conquers Caspe and Teruel.
• Henry II of England invades Ireland

Births

• August 15 - Alfonso IX of Leon (d. 1230)

Deaths

• February 20 - Conan IV, Duke of Brittany (b. 1138)

Heads of states

• England - Henry II Curt Mantle, King of England (reigned 1154 - 1189).
• France - Louis VII, King of France (reigned 1137 - 1180).
• Holy Roman Empire - Frederick I Barbarossa, Holy Roman Emperor (reigned 1152 - 1190).