Upon returning to Kufa, Imam Ali (AS) immediately prepared for the anticipated clash with Mu'awiya. The defying Mu'awiya continued to violate the Islamic principles by personally using the public treasury for espionage and buying peoples' loyalty.
The people of Syria fully believed him and the in false picture he presented. Ultimately this resulted in a confrontation called Battle of Siffin when the troops of the two sides met at Siffin.
The battle saw ferocious fighting for nine days when Mu'awiya's forces were near collapse. His troops were fleeing and in disarray, and their retreat was in massive disorder, running helter skelter. Mu'awiya, alarmed, tense, and frightened, preparing to run away, when he learned of a clever trick.
The trick was indecent and unbecoming, it was to make the Holy Quran as an instrument and exploit it, to use it as a tool to his advantage. Mu'awiya seized on this immediately and commanded his fighters to raise 500 Holy Qurans on tips of spears, in order to stun the troops of Imam Ali. As jolting as it was, this maneuver did break the onslaught and the momentum of Ali's fighters, for they were very pious men.
But Imam Ali was quick to recognize this deceit, he knew how deceptive Mu'awiya was, and now that being near collapse, Mu'awiya wanted to save his neck at the expense of the Quran itself.
With that in mind, Ali (AS) urged his generals not to halt, but to keep fighting since victory was almost at hand. Alas, Ali's generals and fighters were in shock, for the sight of the Holy Quran high on spear heads was startling to say the least. They could not take it.
Not willing to fight, they wanted to accept Mu'awiya's offer to halt the fighting and negotiate instead. The termination of the battle in this manner and the consequences thereof proved to be disastrous to say the least, especially for Ahlul Bayt and Islam.
It is said that there was a conspiracy between Amr Ibnil Aas of Mu'awiya's side, and Ash'ath Ibn Qais, a General in Imam Ali's camp, who was working as a spy against Ali, secretly working as an agent for Mu'awiya. In this battle 45,000 men lost their lives in Mu'awiya's camp, and about 25,000 in Ali's (AS) camp. Many men of high caliber from both sides died, especially Ammar Ibn Yasir, the great Companion of the Prophet (pbuh), who was 90 years old and fought on Imam Ali's side against Mu'awiya.
source : sibtayn