After escaping the Battle of Hattin, Balian of Ibelin, sometimes called Balian of Nablus or Balian d‘Ibelin, went to Tyre.
However, his wife, the Byzantine princess Maria Commena, and children remained in the city of Jerusalem.
Realizing that Jerusalem was Saladin’s next destination, Balian requested, from Saladin himself, to have ample time to go to the city and remove his family.
Saladin agreed to the request, but Balian had to promise to spend only one night in the city, and to never pick up a sword against the Muslims again.
However, when Balian reached the city, he found their defenses poor.
All in all, there were three Knights, including Balian, in all of Jerusalem.
The people begged Balian to stay and help defend them and the city from Saladin’s approaching army.
After writing a letter to the Muslim leader, explaining why he could not fulfill their original agreement, Balian began the preparations for war.
He dubbed every boy and man able to fight, whether he knew how to or not, and found weapons for those he had enlisted.
Saladin’s army attacked on September 20th of 1187.
The people of Jerusalem fought valiantly and under went the siege well.
However, seeing no help coming from any of the other crusaders, those in the city knew it was only a matter of time.
Heavily out numbered and without provisions to last, the city of Jerusalem surrendered on October 1st 1187.
Balian left Jerusalem to negotiate the treaty for surrender with Saladin.
In the end it was promised that the Christians of the city would be able to buy their freedom.
Ten dinars for a man, five for a woman, and one per child.
Also, seven thousand people, of the twenty thousand, would be free to go for thirty thousand dinars.
Those who could not pay or did not fall under the seven thousand, were sent into slavery.
However, Saladin and his brother Al-Adil set free all the aged of the city for no price.
Balian lived and became the Lord of Ibelin, Jaffa, and Mirabel, ruling there, and over all of Beirut, from 1134 to 1155 until he died and his son, Hugh of Ibelin, took his place.

Source:
Knox, Dr. E.L. Skip. The Crusades: The Fall of Jerusalem. January 10, 2002.

Note
The above was taken from my British Literature Paper on The Crusades. Written during the Fall semester of my sophomore year of College in 2004.