The Stavka reacted with alarm at Army Group North’s rapid progress and ordered an immediate counter-attack by a reinforced Northwestern Front. This major attack (known as the Sol’tsy-Dno Offensive Operation) was mounted by 7 rifle divisions, and the 10th Mechanised Corps (dispatched from the Northern Front). It commenced on 14th July and struck 4th Panzer Group’s 56th Panzer Corps (Manstein) advancing on Novgorod. The panzer corps was struck in the flank and rear, and 8th Panzer Division was encircled. Threatened with destruction, 8th Panzer Division broke out westwards (loosing or damaging around 70 tanks in the process) and the situation was stabilised by 18th July. This attack represented the first significant success by Soviet forces in this sector, and delayed any further advance by a week.
By 28th July the 41st Panzer Corps had secured a bridgehead over the Luga River at Kingisepp, and by 31st July 16th Army had advanced to the southern shore of Lake Ilmen. By 5th August Army Group North had established a continuous line just north of Kingisepp, just east of Staraya Russa and Kholm, and linked up with Army Group Centre’s 9th Army which had (temporarily) captured Velikiye Luki. Despite desperate fighting however, large pockets of Red Army soldiers were not captured by Army Group North as they were in the more critical sectors further south.