The '2^nd Action at Bir el Gubi' was fought between British-led and Italian (later reinforced by German) units near Bir el Gubi, in the eastern part of the Italian colony of Libya, within the context of the 'Crusader' (i) operation to effect the relief of the beleaguered port of Tobruk (3/7 December 1941).

The battle followed the '1^st Action at Bir el Gubi', which had been an unsuccessful Allied attempt to capture Bir el Gubi two weeks earlier. Bir el Gubi was a significant tactical position whose capture would have allowed the Allies to outflank the German and Italian forces in Cyrenaica, the eastern part of Libya.

On 18 November, in the area to the north of Bir el Gubi, the British-led forces started 'Crusader' (i) as a new offensive. On 19 November, in the '1^st Action at Bir el Gubi', Generale di Divisione Mario Balotti’s 132a Divisione corazzata 'Ariete' repulsed a British attack, and on 23 November a major armoured battle, known to the Germans as the Totensonntag (Sunday of the Dead) took place in the desert. A battalion group of Generale di Brigata Ismaele di Nisio’s incomplete 136a Divisione corazzata 'Giovani Fascisti' and some Bersaglieri units took position in Bir el Gubi, and one tank company of the 1/32o Reggimento carri of the 132a Divisione corazzata was sent to provide support with its 10 L3 tankettes and two M13/40 medium tanks.

The Italians immediately set about the strengthening of the existing defences, constructing machine gun and anti-tank gun positions, erecting barbed wire barriers and digging foxholes and trenches. These fortifications were created in positions that allowed the defence of Bir el Gubi from attack from any direction. One of the two M13/40 tanks and some of the L3 tankettes, immobilised by mechanical breakdowns, were dug into the ground for service as fixed defensive positions. The Italian soldiers took position in their foxholes and trenches during the evening of 1 December in torrential rain. The garrison also had 10 47-mm 47/32 guns, 24 8-mm (0.315-in) Breda modello 37 machine guns, 12 modello 35 anti-tank rifles, six Solothurn S-18/100 anti-tank rifles and eight 81-mm (3.19-in) mortars.

Following the withdrawal of Major General B. C. Freyberg’s New Zealand 2^nd Division, Lieutenant General N. M. Ritchie, commander of the 8^th Army, had reorganised his rear-echelon units of Major General F. W. Messervy’s Indian 4^th Division: these were Brigadier D. Russell’s Indian 5^th Brigade and Brigadier J. C. O. Marriott’s British 22^nd Guards Brigade. By 3 December another of the Indian 4^th Division’s elements, Brigadier A. Anderson’s Indian 11^th Brigade was heavily engaged against a strongpoint near Bir el Gubi, some 25 miles (40 km) to the south of Ed Duda. The two battalions of the 136a Divisione corazzata on the elevation of Bir el Gubi fought off repeated attacks by the British armour and Indian infantry units during the first week of December. At 12.00 on 3 December, Allied artillery began to shell the Italian positions, causing some losses, among them Maggiore Fulvio Balisti, commander of the I Battaglione, who was wounded. During the night, all the Italian units outside the Bir el Gubi perimeter were captured, along with their vehicles and equipment.

On the morning of 4 December, the British-led forces launched two attacks on Bir el Gubi. Hundreds of men of the 2/Queen’s Own Cameron Highlanders (part of the Indian 11^th Brigade), supported by tanks and an artillery barrage, attacked the positions of the I Battaglione, while the rest of the Indian 11^th Brigade, supported by Valentine infantry tanks of the 7^th Armoured Division, attacked the positions of the II Battaglione farther to the north. Both attacks were repelled, the attackers leaving dozens of killed. However, the attacks did manage to encircle the Italian positions. At about 14.00 on the same day, a third attack was launched against the Italian lines: the Italian defenders resisted for several hours in the face of increasing infantry and artillery pressure, but in the evening one company had to abandon Point 188 and withdrew to Point 184.

The L3 tankettes proved useful against infantry as a result of their armament of two machine guns and their armour, but were powerless against tanks, and all 10 were destroyed. Lieutenant General C. W. M. Norrie, commander of the British XXX Corps, had an overwhelming superiority in the area, but failed to concentrate and co-ordinate the action of his forces, whereas the Italians co-ordinated the actions of their infantry, artillery and light tanks effectively.

During the fighting, Colonnello Ferdinando Tanucci, local commander of the 136a Divisione corazzata, was wounded, and Lieutenant Colonel A. G. Butler, commander of the 1/6^th Rajputana Rifles, was killed. Between 4 and 7 December the XXX Corps launched seven attacks, all repelled, with heavy losses, by the Italian defenders. Hunger and lack of supplies, however, started to weaken the Italian garrison, which asked for reinforcement. General Erwin Rommel, commander of the Panzergruppe 'Afrika', decided to send armoured forces (Generalmajor Walter Neumann-Silkow’s 15^th Panzerdivision and Generalmajor Karl Böttcher’s 21^st Panzerdivision) to support the Italians at Bir el Gubi.

At dawn on 5 December, the first German armoured units arrived near Point 188, which they recaptured after a fierce armoured engagement, and then headed toward Bir el Gubi. The 132a Divisione corazzata and Generale di Divisione Alessandro Piazzoni’s 101a Divisione motorizzata 'Trieste' were also despatched, but the former was stopped by an Allied attack and the latter lost its way in the desert. General Ludwig Crüwell, commander of the Deutsches Afrika Korps, was unaware that Brigadier A. H. Gatehouse’s 4^th Armoured Brigade, which was an element of the 7^th Armoured Division and now with 126 tanks, was more than 20 miles (32 km) away and withdrew to the west. The Indian 11^th Brigade was broken and had to be withdrawn to refit and arrangements were made to bring the 22^nd Guards Brigade into its place.

Tank clashes continued. During the following night the 132a Divisione corazzata managed to reach Bir el Gubi and joined the German armour under Crüwell’s command, and their combined German and Italian force repelled the last British attacks. With the arrival of the 132a Divisione corazzata, the British-led force had lost its numerical superiority and withdrew, so ending the '2^nd Action at Bir el Gubi'.

Crüwell had lost the opportunity to strike a heavy blow on 6 December as the 4^th Armoured Brigade made no move to close up to the 22^nd Guards Brigade: Crüwell waited too long, and on 7 December the 4^th Armoured Brigade did close up. Neumann-Silkow, commander of the 15^th Panzerdivision, was mortally wounded late on 6 December and three days later was succeeded by Generalmajor Gustav von Vaerst. The Axis forces were later forced to abandon Bir el Gubi as 'Crusader' (i) proceeded.