Arriving in the Middle East in late November, the battalion undertook further training near Gaza in Palestine, before moving to Port Said in mid-December to relieve the garrison there. Returning to Palestine in early January they conducted a number of exercises until late February. In March 1941 the battalions of the 9th Division were sent into the desert to relieve the 6th Division that was deploying to Greece; as part of this the 2/17th garrisoned Mersa Brega, near Tripoli. Shortly after this, the Germans landed forces in Africa to reinforce the Italians and the British forces in Libya were forced to retreat from Benghazi to the strategically important port town of Tobruk. The 2/17th fell back as part of the general retreat and subsequently took part in the defence of Tobruk, remaining there for almost seven months during which time the battalion's personnel alternated between conducting patrols in no man's land, raiding, occupying the main defensive position and working in the rear areas. On the night of 13/14 April 1941, a party of about 30 Germans broke into the Australian position and set up eight machine-guns, a couple of mortars and two field guns. Seeing this, the nearest platoon commander, Lieutenant Austin Mackell, launched a counterattack with a small party of men consisting of one corporal and five soldiers. Covered by fire from a position on their flank, the small party was able to successfully attack the position, and as a result, Corporal John Edmondson, who single-handedly accounted for a number of Germans despite being mortally wounded, was later posthumously awarded the Victoria Cross, the nation's highest military decoration. It was the first such award to a member of the 2nd AIF. The battalion's losses during the fighting around Tobruk, including the withdrawal prior to the siege, consisted of 32 dead from all causes, 127 wounded and 14 captured.