President Nixon hoped to ease tensions in the world and create a greater opportunity for peace. He did this by opening diplomatic relations with Communist China and signing a Strategic Arms Limitation Treaty with the Soviet Union. A crisis soon arose for Nixon, however, when war broke out in the Middle East in 1973 when Egypt and Syria attacked Israel. When the United States backed Israel, oil-producing nations in the Middle East retaliated by imposing an embargo on oil sales to the U.S. The shortage of oil caused gasoline prices to skyrocket.
In June 1972 a security guard at the Watergate complex in Washington, D.C., noticed tape over the lock of a door. The investigation that followed revealed a break-in at the Democratic Party headquarters. The White House denied any involvement in the break-in, and Nixon won reelection. However, two reporters for the Washington Post continued to investigate. By 1974 it was evident that Nixon himself had been part of a cover-up. Faced with impeachment, the president resigned. Vice president Gerald Ford became president. The energy crisis and economic problems continued under President Ford.
In 1976 Americans turned to a Georgia governor and peanut farmer to lead them. President Jimmy Carter made energy policy a priority, and he based his foreign policy on human rights. He was successful in negotiating a peace settlement between Israel and Egypt. However, the economy continued to struggle and he angered some Americans by agreeing to return the Panama Canal to Panama. In November 1979 a group of Iranian students captured the U.S. embassy in Tehran and took 52 Americans hostage. This crisis and the inability of the administration to negotiate the hostages' release led Americans to vote for Ronald Reagan in 1980.