Aware that two satraps were not on friendly terms with each other, Dercylidas arranged a ceasefire with Tissaphernes and turned his concentration against Pharnabazus. Moving up the coast, he seized the cities there and then turned inland to gain the surrenders from all the other towns in Aeolis. Terms were agreed for the winter. Dercylidas took up quarters in Bithynia, where he lost a number of his soldiers during plundering expeditions but gained substantial provisions for his army. In the summer of 398 BC he went to Europe, where at the request of the Chersonesians he built a wall across the neck of the peninsula. In the autumn he returned to Asia and taking Atarneus in Aeolis after a long siege, finally invaded Caria – an important route to the interior via the Meander Valley.
To draw Dercylidas away from Caria the two satraps now moved their forces towards Ionia. The two armies finally met but with the satraps as much afraid of the Greek infantry as the Dercylidas was of the Persian cavalry, an armistice was quickly agreed pending negotiation at a higher level. At Caunus in Caria, the navarch Pharax with one hundred and twenty ships was blocking forty Persian ships commanded by the Athenian emigre Conon. Not having enough troops to engage Pharax withdrew to Rhodes; Conon, having collected forty ships, sailed to the Carian Chersonese, north of Rhodes.
Rhodes at this time seems to have been Sparta’s main naval base in the east. The presence of the Spartan fleet probably aggravated the harsh nature of postwar Sparta rule. When Conon arrived it seems that the Rhodians must have taken some measures to close their port to the Peloponnesian fleet, because in 396 BC they revolted from the Spartan state and received Conon and his fleet into their port and city. Supplies sent by the pharaoh Nepherites-I (r.399-393 BC) fell into the hands of the Persians when Egyptian transports unwittingly put into the island on their way to Sparta.
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