By the beginning of Wave Two, the fighting on Kathil had stabilized into something of a stalemate, though one that was continuing to kill and wound AFFS soldiers at an alarming rate. More than that, the world's economy and infrastructure was likewise suffering serious damage as the two armies tried to destroy each other. And while the generals on both sides tried their best to limit civilian casualties and collateral damage, their efforts were proving more and more pointless. As Kathil's southern continent, Muran, entered its prime growing season in the first months of Wave Two, it was obvious to all that the world's agricultural industry would be operating at less than thirty percent capacity, meaning that Kathil would have to import much of its foodstuffs.

The lines of battle were drawn across most of Muran's breadth, with the Allied troops under Marshal Nathaniel Hasek holding District City, and with it the GM production facility. Though Hasek had driven the Loyalist forces back several hundred kilometers, Hauptmann Generals Tadeusz Pashik and Mitchell Weintraub had managed to halt the Allied advance with a series of surprise counterattacks in the Caper Valley region. By sneaking company-sized detachments through that region's rough terrain, the Loyalist generals placed strengthened combined-arms battalions at the Allied right flank, and even in their rear area. Their surprise assault, followed on by an immediate counter-attack, not only stalled the Allied advance", but pushed it into retreat when Marshal Hasek realized that his line could be split into two or thee. Moreover, the Allied forces captured a forward supply dump, ensuring they would be able to continue fighting on for some time longer.

By the middle of December, the front lines had stabilized again, with the Loyalists holding the area east of the Howell River, Including Woodland, and south of the Furillo River. Marshal Hasek and his Allied troops remained on-station across those rivers, ready to pounce on any attempted breakouts, though the marshal was also slowly routing troops to attempt a flanking maneuver to push the Allies out of Woodland.

While Marshal Hasek was preparing that assault, General Weintraub received reports that the Allies were holding a significant number of POWs in camps just a few hundred kilometers away. On the 3rd of January, he made an attack across the Furillo River to hold the Allied force in place while he dispatched a short combat command, with significant air and VTOL support, to the Hammelberg area, where the three largest camps were. There, the Loyalists freed some five thousand POWs, transporting as many back as they could by air. While more than three quarters were left in the field, Weintraub arranged to arm them with infantry weapons and keep a battalion of armor with them for heavier protection.

This makeshift brigade slowly made its way to the south west, dogged by a regiment of Allied armor broken off from the Furillo River defense, but Weintraub managed to keep them from being overrun by making attack after attack from the air. He also pushed more of his own troops across the Furillo, pinning the bulk of the southern Allied force down. Weintraub linked up with the POW brigade on the 14th of January, and though it had taken heavy casualties, their rescue relnvigorat-ed the Loyalist troops, who continued to make their breakout from across the Furillo.

The Loyalist breakout lasted for the rest of the month, but while Marshal Linda Archer and her Fifth Davion Guards soaked up the damage, Major General Randy Hasek-Bills made his own flanking maneuver, hitting General Tadeusz' Eighth Donegal Guards right-rear flank from the northeast. Hasek-Bills continued to attack on the move, completely bypassing Woodland and continuing to the south along the Howell. Not only did he split the Eighth Donegal into two, but he also cut Weintraub off from his lines of communication back to Woodland. The two forces continued their attacks for two more weeks, but by the beginning of February, the attacks had taken their toll on both sides. Reinforced by the Capellan Dragoons, Marshal Archer finally halted Weintraub's breakout at the edge of the Birkshire Forest. Likewise, General Pashik's troops stopped Hasek-Bills through the strategic destruction of several dams and levies, flooding the lands and forcing the Allied general to pull back towards Woodland. Though Pashik was still trapped within Woodland, his forces handily held the city. Wave Two ended, as did Wave One, with both sides in something of a stalemate and with very little change in the status quo.

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