Alright so Rommel began a headlong retreat out of Libya after the disaster at the second battle of El Alamein. He reached the so called Mareth Line, which was a series of French fortifications along the Tunisian/Libyan border; built in the 30s by the French to deter an Italian attack. While Rommel's retreat was derided by both the German and Italian high commands as being unnecessary (they would have preferred him to fight for every inch of Italian land in Libya) it gave Rommel some breathing space. See while the British easily took Tripoli, they had to wait to open the ports to receive fresh supplies as they had lost much of their steam in their rapid advance across Libya. This (along with some fierce rearguard actions by German forces) bought Rommel some time to plan a counter stroke.

There were two Axis field armies in Tunisia at the outset of the campaign, The Afrika Korps under Rommel manning the Mareth Line and the 5th Panzer army under Hans-Jürgen von Arnim commanding in the North. The gap between these forces was wide and the allies sought to cut off the two armies and destroy them in detail. Rommel was promoted to commander of all German/Italian forces in Tunisia eventually (command of his former army went to an Italian commander named Messe). The Americans under Eisenhower's overall command were planning on building up supplies and together with French forces attacking the coastal city of Sfax which would have cut the two Axis armies off from each other. The Axis struck first. Von Arnim struck at the Faid Pass which connected the French and American forces, the French were decimated and the Germans seized control of the pass. By the time Fredendall sent reinforcements it was too late and the American reinforcements were decimated as well.

The Germans then moved onto the town of Sidi Bou Zid, where most of the 1st American armored division was deployed. The deployment of the American armor was absolutely awful, they weren't able to properly communicate or aid each other. After this the Germans moved onto the town of Sbelita where again the Americans were sent packing with heavy losses. The Americans took up positions around the Kasserine pass, which defended their main supply base at Tebessa.

Rommel was now freed up to launch an attack and take the supplies located Tebessa and install a sense of inferiority in the American soldiers while they were still learning to fight. However, backstage politics led to Rommel having to dilute his offensive power to take both the Kasserine and Sbiba passes.

The attack didn't actually start well for the Axis. The German advance at the Sbiba pass was stopped cold by allied anti-tank guns and mines.

The attack at the Kasserine pass looked to be going that way. Several German attacks were repulsed, but reinforcements in the form of an Italian armored division allowed Rommel to sweep the remaining allied forces out of the pass. After that the attack largely died down and eventually Rommel retreated back to his starting point. He had given the allies a decent thrashing, but hadn't actually accomplished anything of strategic value.

So what exactly happened that led to Fredendall being replaced and what made the battle such a disaster?

Well for starters Fredendall was distant from the battle at a time when it was considered necessary for Americans corps commanders to occasionally lead from close to the front and be there to coordinate forces. Fredendall was 75 miles away from his corps, in a cave he had ordered his engineers to make via explosives. This was considered very cowardly and irresponsible. It was made worse by the fact that Fredendall employed an entire AA unit in defending his HQ when his men were in desperate need of anti-aircraft support.

Fredendall had very little concept of air support, and failed to properly coordinate with the American 12th airforce attached to his command. As a result the Germans were able to actually dominate the skies for a time when attacking the Americans.

Thirdly, Fredendall was pretty much responsible for the 1st American armored division getting mauled at the battle of Sidi Bou Zid. Fredendall had ordered one of his subordinates Terry Allen to put infantry onto the two high hills nearest the western exit from Faid Pass. Meanwhile, another subordinate, Orlando Ward, was ordered to deploy his forces on the hills too, and put tanks on the plain farther west. It was an amateur deployment. The hills were 15 miles apart, so men on one hill couldn’t support each other. Spreading the tanks out on the plain exposed them to German attack from the air and from land. Ward did as ordered, concentrating the tanks of Combat Command A at the crossroads village of Sidi-bou-Zid. This resulted in a massive disaster for the men of the 1st armored division. Ward referred to Fredendall as a "two faced son of a bitch" in his diary.

For all this incompetence, Fredendall was relieved of command, promoted, and returned home to a hero's welcome. While Patton took over command of II corps.

Despite the thrashing taken by the Americans, they did show some positive signs, as Rommel himself noted:

Although it was true that the American troops could not yet be compared with the veteran troops of the Eighth Army, yet they made up for their lack of experience by their far better and more plentiful equipment and their tactically more flexible command. In fact, their armament in antitank weapons and armored vehicles was so enormous that we could look forward with but small hope of success to the coming mobile battles. The tactical conduct of the enemy’s defense had been first class. They had recovered very quickly after the first shock and had soon succeeded in damming up our advance by grouping their reserves to defend the passes and other suitable points.