Hungarian units suffered tremendous losses during the German defeat at Stalingrad on the eastern front in 1942–1943. After the defeat, Hungarian Admiral Miklos Horthy and Prime Minister Miklos Kallay recognized that Germany would likely lose the war.
With Horthy's tacit approval, Kallay tried to negotiate a separate armistice for Hungary with the western Allies. To prevent these efforts, German forces occupied Hungary on March 19, 1944. Horthy was permitted to remain as Regent. Kallay was dismissed and the Germans installed General Dome Sztojay as prime minister. Sztojay had previously served as Hungarian minister to Berlin and was fanatically pro-German. He committed Hungary to continuing the war effort and cooperated with the Germans in their efforts to deport the Hungarian Jews.
In April 1944, Hungarian authorities ordered Hungarian Jews living outside Budapest (roughly 500,000) to concentrate in certain cities, usually regional government seats. Hungarian gendarmes were sent into the rural regions to round up the Jews and dispatch them to the cities.
The urban areas in which the Jews were forced to concentrate were enclosed and referred to as ghettos. Sometimes the ghettos encompassed the area of a former Jewish neighborhood. In other cases the ghetto was merely a single building, such as a factory.
In some Hungarian cities, Jews were compelled to live outdoors, without shelter or sanitary facilities. Food and water supplies were dangerously inadequate. Medical care was virtually non-existent. Hungarian authorities forbade the Jews from leaving the ghettos. Police guarded the perimeters of the enclosures. Individual gendarmes often tortured Jews and extorted personal valuables from them. None of these ghettos existed for more than a few weeks and many were liquidated within days.
In mid-May 1944, the Hungarian authorities, in coordination with the German Security Police, began to systematically deport the Hungarian Jews. SS Colonel Adolf Eichmann was chief of the team of "deportation experts" that worked with the Hungarian authorities. The Hungarian police carried out the roundups and forced the Jews onto the deportation trains.
In less than two months, nearly 440,000 Jews were deported from Hungary in more than 145 trains. Most were deported to Auschwitz. Thousands were also sent to the border with Austria to be used for digging fortification trenches. By the end of July 1944, the only Jewish community left in Hungary was that of Budapest, the capital.
In light of the worsening military situation and facing threats (from Allied leaders) of war crimes trials, Horthy ordered a halt to the deportations on July 7, 1944. In August, he dismissed the Sztojay government and resumed efforts to reach an armistice, this time with the Soviet Union whose army was on Hungary's borders.
Horthy had begun final negotiations with Soviet army commanders by mid-October, 1944, when the Germans sponsored a coup d'etat. They arrested Horthy and installed a new Hungarian government under Ferenc Szalasi, the leader of the fascist and radically antisemitic Arrow Cross party.
During the Szalasi regime, Arrow Cross gangs perpetrated a reign of arbitrary terror against the Jews of Budapest. Hundreds of Jews, both men and women, were violently murdered. Many others died from the brutal conditions of forced labor to which the Arrow Cross subjected them.
In November 1944, the Arrow Cross regime ordered the remaining Jews of Budapest into a ghetto which, covering an area of 0.1 square miles, held nearly 70,000 people. Several thousand Budapest Jews were also marched on foot under Hungarian guard to the Austrian border during November and December 1944. Many who were too weak to continue marching in the bitter cold were shot along the way.
In January 1945, with Soviet forces already in the Pest section of Budapest, Hungary signed an armistice. Soviet forces liberated the Buda section of the city on February 13, 1945. Soviet troops drove the last German units and their Arrow Cross collaborators out of western Hungary in early April 1945.
Of approximately 825,000 Jews living in Hungary in 1941, about 63,000 died or were killed prior to the German occupation of March 1944. Under German occupation, just over 500,000 died from maltreatment or were murdered. Some 255,000 Jews, less than one-third of those who had lived within enlarged Hungary in March 1944, survived the Holocaust. About 190,000 of these were residents of Hungary in its 1920 borders.