Since its founding in the aftermath of the failed 1924 coup, order had been maintained in Transamur through a combination of brute force and conservative resentment of the dysfunctional and "pink" Social Revolutionary-run Russian Republic. However, as Russia grew strong again and right-wing alternatives to the SR coalition began to grow, like Boris Savinkov's Narodno-Respublikanskaya Partiya Rossiyi (People's Republican Party of Russia), popular opinion began to turn towards reunification. These feelings were strongest among the youth of Transamur, who had little to no memory of the civil war or the Russia before it, and even less love for the Japanese puppet regime they lived under. Defections became a common phenomenon, especially near the city of Khabarovsk where the disputed islands between the Ussuri and Amur rivers offered a convenient escape point. To stymie this, the Transamurian army constructed a 50-man outpost on the western part of the island, near the border with the Fengtian Government. However, the outpost was left unoccupied most of the time to avoid confrontations with Russian troops.
On July 5th, 1935, a company of soldiers were dispatched to Big Ussuri Island in pursuit of four deserters attempting to cross the Amur. The size of the unit frightened Lt. General Rokossovsky, commander of the Pokrovka outpost, and he ordered his men to mobilize and repel the "invasion". The Transamurians retreated under fire, but were ordered by their commanders to man the fort and prepare to repel the "invasion". Two weeks of confused skirmishing followed, as Russian papers trumpeted the first liberation of Russian soil from foreign hands since the Brusilov Offensive, until Petrograd and Vladivostok came to an agreement on how to stand down: The deserters (who had long made themselves scarce) would not be pursued, and Russia's troops would withdraw from the island. The order was telegraphed to Pokrovka on the 18th, stating that “since there are no Russian civilians on the Island to defend, the troops should return to Pokrovka outpost on the 21st of July”
The army and public were outraged by Kerensky's decision. The general staff felt that they had a clean shot to at least take Khabarovsk if not all of Transamur before Japan could react, and saw little chance of Fengtian joining the conflict. On July 20th, 300 men with fresh Mosin–Nagant M91/30 rifles in insignialess military uniforms surrounded the Big Ussuri Island Fort and demanded its surrender. The Pokrovka garrison joined them, and the defenders quickly surrendered or fled towards Fengtian. The men greeted Lt. Gen. Rokossovsky with "Glory to Russia! Glory to the Heroes!"- the slogan of Savinkov's party. They identified themselves as the Amur Voluntary Battalion of the NRPR's Combat Squads, dispatched from Blagoveshchensk to assist in the liberation of the Motherland. Rokossovksy telegraphed back that "300 civilians were discovered on the western part of the island and have been secured".
The news was received with jubilation by the public and stark terror by the government. The Russian Navy stationed in the Baltic was no match for the IJN, let alone the token force in Magadan. Mongolia's position was uncertain, and with it the operation of the Trans-Siberian Railway and a land war. Japan feared a rebellion in Transamur, as citizens of Khabarovsk began evacuating themselves to Russia and attempting to bring Russian troops into the city. Neither side was certain of what the Qing and German attitudes were, and the specter of a general war in Northeast Asia was growing. Unable to trust each other, Petrograd and Tokyo asked Germany to mediate a solution. After a week of discussions in Berlin, an agreement was reached: Big Ussuri Island would become Terra nullius, claimed by neither country, and the outpost would be dismantled, while the families of the deserters would be allowed to leave Transamur and join them.
The combination of a Russian retreat from the island and the Khabarovsk issue being unaddressed enraged Russia at large. Kerensky was loathed before, but now he had made himself the symbol of everything wrong with Russia- a country with the strength of a world power without the will to be one. Even the Left-SRs broke with their coalition partners, and joined the NRPR in voting to dissolve the Duma and call elections for that October. Transamurians were disappointed by Russia's retreat, but were disgusted by the Japanese handling negotiations for them in Berlin, confirming their country's vassal status and illegitimacy.