The long and the short of it is that wartime Allied agreements, firmed up at the Yalta Conference, divided the capital city into four occupation zones (US, British, French, Soviet) governed by their respective military occupation authorities. As the Cold War began to take form in the first postwar years, the Western Allies held that the status of Berlin could only be hashed out with a proper peace treaty while the Soviets maintained that the Western Allies were violating preexisting agreements by countenancing a division of Germany into two separate states. From the Soviet perspective, Berlin was an anomaly and the American-led position was hypocritical given US sponsorship of German division. But the Western Allied commitment to the Four-Party system of Berlin and the presence of military personnel precluded any forceful takeover of the Western part of the city. Although Berlin became the sight of periodic crises during the first half of the Cold War, this Western military presence meant escalating brinkmanship could lead to a wider military conflict. West Berlin became a de facto part of West Germany, subject to Basic Law and its citizens held FRG passports, but the western half of the city also enjoyed a number of special privileges. West Berlin men were not subject to conscription and Bonn doled out subsidies and tax breaks to West Berliners to prevent outflight from the city ( West Berlin wags often termed these breaks Zitterpraemie (jitters premiums) )