Advancing to the north
As the Allies fought their way inland in the south of France, the Falaise pocket in the north threatened to cut off thousands of German troops. Hitler agreed to allow his generals to withdraw to better defensive positions in France on both fronts. By then the armored and mobile components of Operation Dragoon were well established ashore and as the Germans tried to withdraw they were disconcerted to learn that the Allies advanced faster than their own troops could retreat. Germans withdrawing to a defensive position north of the landing sites found it already occupied by Allied units, supported by mobile artillery and armored vehicles.
The Germans left garrisons in the ports of Toulon and Marseille, with orders to deny them to the Allies for as long as possible, and to destroy the valuable port facilities before they were taken. German units consolidated as they withdrew to the north, with the overall plan being the creation of a defensive line near the city of Dijon. The German 11 Panzer division was ordered to cover the German retreat along the Rhone River. The Allied advance became a three pronged drive to the north, with VI Corps advancing to Grenoble and Lyon, while the French struck west at Marseilles and Toulon. In many areas the fighting was intense. House to house combat was common in the villages.
The Allies were able to monitor German communications through Ultra intercepts. This provided them with knowledge of the German plans to establish a defense line from Dijon to the Swiss frontier. Truscott sent his fast mobile units, known as Taskforce Butler, to cut off the German withdrawal at the town of Montelimar. Taskforce Butler was supported by the 36th Infantry Division. The two units were ordered to both block the German withdrawal at the town and continue to send units north to Grenoble. Taskforce Butler established positions north of Montelimar on August 21, though the speed of its advance meant it was by then low on fuel.
On August 22 the first units of the 36th Infantry arrived, and strong support from the FFI helped Taskforce Butler harass the retreating Germans, but the lack of fuel and other supplies rendered the Allies too weak to launch a full assault on the enemy. The German 11th Panzer division reached the area in strength on August 24 and heavy fighting around Montelimar continued. The Allies dealt with German counterattacks, withdrew, counterattacked themselves, and retook lost ground. As the battle around Montelimar raged more German units withdrew through the town to the north, pursued by the rest of VI Corps.
The battle at Montelimar became a stalemate, with the Allies unable to block the German withdrawal and the Germans unable to dislodge the Allies from their positions. By August 28 the remaining Germans, a rear guard unit in the town, surrendered and the Allies occupied Montelimar the next day. More than 57,000 German troops had been taken prisoner by that point of Operation Dragoon. The Germans had suffered 2,100 casualties at Montelimar, including 8,000 taken prisoners, while the Americans of Taskforce Butler and the 36th Infantry division had lost just under 1,600 men. The German retreat toward Dijon continued.