This was the British and US undertaking to pass control of the Venezia Giulia region to Italy and Yugoslavia, and to oversee the establishment of a small free state centred on Trieste (summer 1945/47).
The Western Allies used the phrase 'Julian March' as the official name for the area, which was claimed by both Italy and Yugoslavia between 1945 and 1947. In June 1945, the Morgan Line was drawn, dividing the region into two zones administered militarily. Zone B was under Yugoslav administration, while Zone A was the cities of Pula, Gorizia and Trieste, the Soča valley and most of the Kras plateau, which was under Anglo-US administration. During this period, many Italians left the area under Yugoslav occupation in the so-called 'Istrian exodus'.
In 1946, US President Harry S Truman ordered an enlargement of the US troop strength in Zone A and the reinforcement of US air strength in northern Italy after Yugoslav forces had shot down two US Army transport aircraft flying over the region.
There were four proposed solutions, and in 1947 agreement on the border was reached at the Paris Peace Conference. Yugoslavia acquired all the northern portion of the region to the east of Gorizia, as well as most of Istria and the city of Fiume. A Free Territory of Trieste was created, divided into two zones, one of them under Allied and the other under Yugoslav military administration. Tensions continued, however, and in 1954 the territory was abolished and divided between Italy, which gained the city of Trieste and its surroundings, and Yugoslavia.