The question of which country this territory would belong to after the war affected the lives of the people living there and every aspect of social development. The Morgan Line marked out in June 1945 separated the city of Trieste from its hinterland and thus interrupted a natural connection established over the course of many years, impeding the flow of goods and labour. The Morgan Line divided the Julian March into Zone A, under the Allied Military Government, and Zone B, under the administration of the Yugoslav Army. Within the Slovene part of Zone B, the Eastern Primorska district, the highest administrative body was the Commissariat of the Regional National Liberation Committee for the Slovene Littoral (PPNOO), while at the (local) district level the highest administrative bodies were the district national liberation committees. In addition to the tasks of post-war reconstruction in all areas, these bodies participated in the diplomatic battle being fought over the border, which was particularly intense in the period from the summer of 1945 to October 1946. Every session at which the foreign ministers of the four great powers (or their deputies) met to decide the border between Italy and Yugoslavia, and in particular the decisions adopted at these sessions, required a response. Countless demonstrations were therefore organised and a large number of resolutions were dispatched to various recipients. These activities reached their culmination in March 1946 when the Julian March was visited by an international demarcation commission charged with demarcating the new border on the ground, and later when a decision was being made with regard to the various proposed borders. The commission ended up elaborating four different proposals. These were then discussed by the Council of Foreign Ministers, which chose the French proposal. The peace conference, held in Paris, ran from the end of July until 26 October 1946. The question of the border in the Julian March was discussed on the night of 9 and 10 October and the following decision was adopted: Yugoslavia would receive the territory to the east of the French line, while the territory to the west of it would be divided into two parts – the western part would go to Italy, while the Free Territory of Trieste (FTT) would be established from the southern part (from Duino/Devin to the river Quieto/Mirna). The Peace Treaty was signed on 10 February 1947 and entered into force on 15 September of the same year. As a result of the Peace Treaty, part of Slovene Istria was assigned to Yugoslavia and part was incorporated into the FTT.

The Free Territory of Trieste (FTT), conceived as a new, independent state entity with its own governor, never truly came into being in this form. It was divided once again between two military governments, which continued to administer it until its dissolution, since a governor was never appointed. As a result, the struggle for this territory continued. In March 1948 three of the great powers signed a triple declaration in favour of the return of the FTT to Italy. Following the Tito–Stalin split, when the Soviet Union broke all ties with Yugoslavia, the FTT lost its strategic importance and the resolution of the triple declaration was never implemented. In the years that followed, the Western Allies increasingly favoured a solution to the so-called Trieste question based on the division of the FTT between the two countries. Negotiations began in 1951. The following year saw the signing of the First London Agreement, under which Italy gained greater influence in Zone A. In Zone B the administrative unit covering the Istrian district was abolished and its competences transferred to the districts of Koper and Buje, which thus created even closer ties with Slovenia and Croatia, respectively. The next year, 1953, was the most critical of all: to begin with Italy began mustering troops on the Yugoslav border, convinced that Yugoslavia wanted to occupy Zone B; then, on 8 October, Great Britain and the USA announced that they were going to cede Zone A to Italy. The Yugoslav government responded swiftly and decisively by closing the border between the two zones, announcing a mobilisation and ordering its army to march into Zone B. Tensions subsided in December when the two countries stood their armies down and the Western Allies prepared a new plan to resolve the Trieste question. The demarcation issue was finally resolved on 5 October 1954 with the signing of the London Memorandum, under which the territory was divided between the two countries along the border separating Zone A and Zone B, with some minor changes in Yugoslavia’s favour.