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The Greek world after the Peloponnesian War was in disarray. Sparta had enlisted the help of her old enemy Persia in her victory over Athens. Although Sparta had kings her most powerful leader was the general Lysander. Lysander became friends with the Persian viceroy Cyrus, brother of the Persian king Artaxerxes. In 402 he helped Cyrus in a failed coup attempt. In 396 the Greek king Agesilaus implemented a plan to free the Greek cities of Asia Minor from Persian rule, even though Sparta had agreed to give up the cities in return for support in the Peloponnesian War. Artaxerxes was understandably upset with Sparta. The former Spartan allies of Thebes and Corinth were also annoyed with Sparta because they got no rewards from the Peloponnesian War. The Persians teamed with Corinth and Thebes against Sparta in what is known as the Corinthian War.

The land battles in the war were inconclusive, though they resulted in the death of Lysander. However, the Persian navy, commanded by the Athenian(!) Conon, destroyed the Spartan navy. Conon returned to Athens and used Persian money to rebuild Athens. Artaxerxes then made peace (the King's Peace in 386 BC) with Sparta because he didn't want a revival of the Athenian Empire, and Sparta and Persia agreed to fight against Athenian "alliances" (i.e. weak cities being forced to pay tribute to Athens).

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