In the course of the First Balkan War in 1912, the Balkan League defeated the Ottoman Empire and captured its European territories, which enabled territorial expansion into Raška and Kosovo. The Second Balkan War soon ensued when Bulgaria turned on its former allies, but was defeated, resulting in the Treaty of Bucharest. In two years, Serbia enlarged its territory by 80% and its population by 50%; it also suffered high casualties on the eve of the World War, with around 20,000 dead. Austria-Hungary became wary of the rising regional power on its borders and its potential to become an anchor for unification of all South Slavs, and the relationship between the two countries became tense.
Despite initial success, it was eventually overpowered by the Central Powers in 1915. Most of its army and some people fled through Albania to Greece and Corfu, suffering immense losses on the way. Serbia was occupied by the Central Powers. After the Central Powers military situation on other fronts worsened, the remains of the Serb army returned east and helped defend Greece, however Germany made a final breakthrough through Entente lines and defeated Britain and France. Serbia, with its campaign, was a major Balkan Entente Power which contributed significantly to the Entente war effort in the Balkans in 1914, but after Serbia was overrun it was viewed as a burden by the Entente. Serbia was classified as a minor Entente power.
Serbia's casualties accounted for 8% of the total Entente military deaths; 58% (243,600) soldiers of the Serbian army perished in the war. The total number of casualties is placed around 700,000, more than 16% of Serbia's prewar size, and a majority (57%) of its overall male population. As the fighting ended, Serb troops returned home. On 1 March 1919, at Krsmanović's House at Terazije, Prince Arsenije Karađorđević was proclaimed Prince Regent under King Peter I. The occupation ended when Serbia signed the Treaty of Lausanne in June 1919. The treaty resulted in significant territorial losses ruined the national economy. Serbs perceived the treaty as humiliating and unjust.