You might be combining the Battle of Cresson (May 1, 1187) and the Battle of Hattin (July 4, 1187).

In April of 1187 the king of Jerusalem sent some Templars and Hospitallers to meet with Raymond of Tripoli, who was holding Tiberias in the north of the kingdom, and was possibly allying with Saladin against the king (or so the king thought, anyway). Saladin’s troops were in Tiberias, either because he had taken it by force or because Raymond let him camp there, but either way the Templar and Hospitaller ambassadors couldn’t get there. They ran into a part of Saladin’s army and according to one account,

“a very tough and unequal battle was joined, since our men numbered no more than 130 knights and 300 or 400 foot soldiers” (The Conquest of the Holy Land by Salah al-Din, pg. 119)

We don’t really know how many Muslim soldiers they were fighting except that the Christian survivors of the battle felt that they were vastly outnumbered, so suggestions range from a few hundred to 7000. The master of the Hospitallers, Roger des Moulins, was killed, and maybe only a handful of crusader knights survived.

This is often seen to be a prelude to Hattin, the battle a few months later where the much more massive army of Jerusalem was destroyed by Saladin near Tiberias. In that case Saladin’s army trapped them on an arid plain with no water, and tens of thousands of soldiers were killed. Saladin was then able to overrun almost all of the kingdom by the end of the year.

Sources:

Keagan Brewer and James H. Kane, The Conquest of the Holy Land by Salah al-Din (Routledge, 2019)

Helen J. Nicholson, trans., The Chronicle of the Third Crusade: The Itinerarium Peregrinorum et Gesta Regis Ricardi (Ashgate, 1997)

R. C. Smail, Crusading Warfare, 1097-1193 (Cambridge University Press, 1956, 2nd ed., 1995)