What compromise ended the Third Crusade? Muslims continued to rule Jerusalem, but they allowed Christian pilgrims free access to the city. It was a compromise negotiated with Muslim leader Saladin to give access for pilgrims to Jerusalem (a Christian foothold maintained in the Middle East). The Third Crusade had the objective to retake Jerusalem after its fall to Saladin in 1187 CE (it was led by three European monarchs). The campaign was a failure. The Third Crusade collapsed because the western leaders found themselves without sufficient men and resources to resist the still intact armies of Saladin.