The northern prong of the German encirclement met stiff resistance as soon as it turned southeast from the Salla–Korya road. XXXVI Corps added another regiment and two battalions from its reserve—the 324th Infantry Regiment from the 163rd Infantry Division—to the northern encirclement force.
The Army of Norway had wanted a much wider envelopment—extending as far as to the Nurmi River—to ensure that the Soviet divisions in the lake region were trapped and destroyed. The XXXVI Corps maintained that such a deep encirclement was beyond its capability. This hotly disputed difference of opinion between the two headquarters led to a compromise involving the strengthening of the northern encircling force.
The troops of the northern prong of the encirclement struggled mightily in the difficult terrain and against repeated Soviet counterattacks. The two regiments were advancing abreast and they had to cut roads through the wilderness as they moved forward.
The Soviet reinforcements were beginning to make themselves felt by launching continuous counterattacks against the northern pincer movement and against the Finns east of Apa Lake. Falkenhorst viewed an immediate attack as the only solution to the XXXVI Corps problem. However, General Feige and the commander of the 169th Division were pessimistic since the 169th lacked the strength to cut the Kayrala–Alakurtti road.
Falkenhorst, running out of patience, visited the left flank of the 169th Division in person on July 23. In a one-sided conversation he had with General Dittmar, the commander of the 169th Division, he angrily castigated the division commander for having allowed two or three Soviet regiments, badly mauled at Salla, time to recover. As far as poor roads were concerned, he observed that they were boulevards compared to those in the Mountain Corps Norway area.8
Back at his headquarters, Falkenhorst composed a pointed message to General Feige describing the negative impressions he gained from his visit to the 169th Division. He stated that the time for debate and assessments were over and concluded with two directives and a warning: 1) An immediate end to any talk about stationary warfare or he would ask OKW for a more aggressive corps commander and 2) The establishment of a firm date for the resumption of the attack. Feige got the message and set the date and time of the attack for July 26 at 2300 hours.
The XXXVI Corps attack began on schedule but bogged down quickly against stubborn Soviet defenses. The 169th Division launched its attack with two regiments forward. The Soviets launched a counterattack against the left flank regiment before it got out of its attack positions. The other regiment gained less than two kilometers before it was also stopped and pinned down. The 6th Finnish Division was given the mission of tying down Soviet forces in the south until the 169th Division had broken through the northern defenses. Initially, the 6th Division made good progress but was then thrown back by a Soviet counterattack.
Feige informed Falkenhorst on July 27 that his attacks could not achieve any decisive results. Colonel Buschenhagen, the Army of Norway chief of staff, told Feige that the attacks had to continue because Hitler wanted to cut the Murmansk Railroad in at least one place. Feige thereupon committed his two reserve battalions to the attack on the northern flank but it failed.
The attacks by the XXXVI Corps had come to a complete standstill by July 28. The Army of Norway ordered the corps to conduct only limited offensive actions to keep Soviet forces tied down so that they could not be switched against the III Finnish Corps or against Mountain Corps Norway. The Army of Norway reported to OKW that the offensive could not be resumed unless it was assigned an additional division. Hitler validated the Army of Norway action on July 30 and ordered the termination of the XXXVI Corps offensive, an offensive that had started a month earlier with high hopes of success. The results of the hard-fought actions of the XXXVI Corps were meager and high in costs. The corps had advanced across the border to a distance of 20 kilometers and had suffered 5,500 casualties, 3,296 of them in the 169th Division.
Führer Directive Number 34 on July 30 ordered that the attack in the direction of Kandalaksha be halted and the switching of the main effort by the Army of Norway to the Finnish III Corps’ drive to Loukhi. Only enough forces would be left with XXXVI Corps for defense of the terrain it had captured and as deception of future offensive operations. If operations against Loukhi also failed, the German forces with III Finnish Corps were to be withdrawn and transferred to the Karelian front.9 Falkenhorst had been a proponent of the idea that the Murmansk Railroad could be reached and cut most quickly at Loukhi.
Major General Siilasvuo had divided 3rd Division into two groups—F and J. The SS units had not yet been attached to III Corps. Siilasvuo sent Group J, consisting of one reinforced regiment, across the border in the direction of the town of Kestenga. Group F, consisting of two regiments, crossed the border east of Suomussalmi and advanced in the direction of Ukhta. The corps, in accordance with the Army of Norway plan, placed its main effort with Group F. The two regiments crossed the border at different points, about 60 kilometers apart, for a converging attack on the village of Voynitsa. The Soviet forces opposing III Corps, consisting of the 54th Rifle Division, split to meet the drives of both Finnish groups.
Numerically, the attackers and defenders were about equal but the advantage was with the attacker who presented multiple threats over a relatively wide area. The III Corps offensive therefore made good progress against weak and disorganized resistance. Group J reached Makarely, about 27 kilometers from the border, on July 5, and the southern prong of the concentric advance of Group F had reached Ponga Guba, 45 kilometers east of the border. The two regiments of Group F reached Voynitsa on July 10, one from the west and one from the south. Here they encountered a tough center of resistance, which they encircled and destroyed by July 19.
On that day, elements of Group J reached the 13-kilometer long Sofyanga River connecting Pya Lake and Top Lake. The river was a major obstacle and defended in strength by the Soviets. Lieutenant Colonel Turtola was confident that if he could seize the narrows between the two lakes he could then advance on Kestenga without worrying about flank threats. A good road covered the 67 kilometers between Kestenga and Loukhi. It appears that the actual commander of Group J was Major General Väinö Henrik Palojärvi after major elements of SS Division Nord were attached.
Colonel Buschenhagen, the Army of Norway’s chief of staff, visited Group J on July 18. He was surprised by the relative rapidity of the Finnish advance. They had covered over 65 kilometers and built a road as they advanced. Finnish expertise in forest warfare had been obvious.10
Colonel Buschenhagen discussed his observations with General Falkenhorst when he returned to headquarters. This discussion led to a decision to reinforce success by sending an infantry regiment and an artillery battalion from SS Division Nord to reinforce Group J. General Siilasvuo also contributed to strengthening Group J by moving two infantry battalions from Group F and attaching them to Group J. This group now had the strength of about three infantry regiments. Further SS reinforcements were provided at the end of July when the Army of Norway became concerned about partisan activities and the exposed northern flank of Group J.