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They had held the northern end of the bridge that crossed the Lower Rhine for nine days, the last three without water.
British reinforcements have not been able to secure the south bank of the river and a German counteroffensive has managed to take the town of Elst to the south of Arnhem.
The failure of the daring airborne operation designed to take the rivers Rhine, Waal and Maas and open the way for an Allied assault on Germany itself has ruled out an early end to the war.
Nevertheless the Allies hold crossings over the River Waal at Nijmegen and the River Maas at Eindhoven, securing the defence of the port of Antwerp liberated earlier this month.
There were high hopes of success when on 17 September two US and one British airborne division flew out to the Netherlands in excellent weather conditions.
The US 82nd and 101st Airborne Divisions landed north and south of the Meuse, and secured the crossings of the Meuse and Waal as well as the road south into Belgium.
The British 1st Airborne Division dropped 10km (six miles) west of Arnhem, the most northerly of the three positions, aiming to secure the road bridge in Arnhem and the rail bridge to the west of the town.
They were to wait for reinforcements from the 12th, 30th and 8th Corps of the British Second Army - but their progress was held up by German flank attacks all along the narrow Eindhoven-Nijmegen road.
By the time the Polish airborne brigade was dropped on the south bank the British at Arnhem were completely outflanked and were running low on ammunition and supplies.
Most supplies that were dropped by the RAF have landed in enemy-held territory.
The German news agency reported 600 British surrendered today in a small village west of Arnhem and that, over the last few days, had given up 1,400 wounded men to the Germans.
It said: "Of the remnants of the airborne troops west of Arnhem five officers and 120 men have been made prisoners. These were still amply supplied with weapons but in a state of complete physical exhaustion and hunger."
It went on to say that a small group of airborne troops were still defending themselves in the ruins of the village.
The Battle of Arnhem was part of Operation Market-Garden (17-26 September), a joint land-airborne operation devised by British General Sir Bernard Montgomery designed to outflank German defences by crossing the River Rhine and opening the way for an Allied thrust towards the Ruhr and an early end to the war.
It was intended that the ground forces would link up with the airborne forces that had captured the bridges.
The total amount of men in the initial drop was more than 16,500 paratroops and 3,500 troops in gliders.
The Allies believed that German defences in the area were relatively poor. In fact, two divisions of 1st SS Panzer Corps were in the area and had been practising how to tackle an airborne attack.
The American landings were a success, but the British were dropped too far from their bridges, losing the element of surprise.
The British paratroops succeeded in capturing the north end of only one bridge at Arnhem and were soon pinned down under a fierce attack.
Bad weather and German attacks delayed the arrival of vital reinforcements and on 25 September Montgomery gave the order to withdraw from Arnhem.
On the night of 25 September, about a quarter of the 10,000 airborne troops who had landed managed to withdraw across the river. In total 1,130 paratroops were killed and 6,450 were captured. The Germans estimated their dead and wounded at 3,300.
It would be another four months before the Allies crossed the Rhine again and captured the German industrial heartland.
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