diff --git a/server/plrhand.cpp b/server/plrhand.cpp
index 902057fa40..bd61ec507e 100644
--- a/server/plrhand.cpp
+++ b/server/plrhand.cpp
@@ -788,49 +788,13 @@ void handle_diplomacy_cancel_pact(struct player *pplayer,
     return;
   }
 
-  // check what the new status will be
-  new_type = cancel_pact_result(old_type);
-
-  // avoid accidentally breaking alliances
-  if (new_type == DS_WAR) {
-    bool blocking_alliances = false;
-
-    players_iterate_alive(pplayer3)
-    {
-      if (pplayer3 != pplayer && pplayer3 != pplayer2
-          && pplayers_allied(pplayer3, pplayer)
-          && pplayers_allied(pplayer3, pplayer2)) {
-        blocking_alliances = true;
-
-        if (players_on_same_team(pplayer, pplayer3)) {
-          notify_player(
-              pplayer, nullptr, E_TREATY_BROKEN, ftc_server,
-              _("Your advisors discourage you from cancelling your pact "
-                "with the %s, as this would force your team mate %s to "
-                "break their alliance with the %s."),
-              nation_plural_for_player(pplayer2), player_name(pplayer3),
-              nation_plural_for_player(pplayer2));
-        } else {
-          notify_player(pplayer, nullptr, E_TREATY_BROKEN, ftc_server,
-                        _("Your advisors discourage you from cancelling "
-                          "your pact with the %s, as this would break your "
-                          "alliance with the %s."),
-                        nation_plural_for_player(pplayer2),
-                        nation_plural_for_player(pplayer3));
-        }
-      }
-    }
-    players_iterate_alive_end;
-
-    if (blocking_alliances) {
-      return;
-    }
-  }
-
   reject_all_treaties(pplayer);
   reject_all_treaties(pplayer2);
   // else, breaking a treaty
 
+  // check what the new status will be
+  new_type = cancel_pact_result(old_type);
+
   ds_plrplr2 = player_diplstate_get(pplayer, pplayer2);
   ds_plr2plr = player_diplstate_get(pplayer2, pplayer);
 
@@ -911,6 +875,41 @@ void handle_diplomacy_cancel_pact(struct player *pplayer,
                 player_name(pplayer), nation_plural_for_player(pplayer2),
                 nation_plural_for_player(pplayer),
                 diplstate_type_translated_name(new_type));
+
+  // Check fall-out of a war declaration.
+  players_iterate_alive(other)
+  {
+    if (other != pplayer && other != pplayer2 && new_type == DS_WAR
+        && pplayers_allied(pplayer2, other)
+        && pplayers_allied(pplayer, other)) {
+      if (!players_on_same_team(pplayer, other)) {
+        /* If an ally declares war on another ally, break off your alliance
+         * to the aggressor. This prevents in-alliance wars, which are not
+         * permitted. */
+        notify_player(other, nullptr, E_TREATY_BROKEN, ftc_server,
+                      _("%s has attacked your ally %s! "
+                        "You cancel your alliance to the aggressor."),
+                      player_name(pplayer), player_name(pplayer2));
+        player_diplstate_get(other, pplayer)->has_reason_to_cancel = 1;
+        player_update_last_war_action(other);
+        handle_diplomacy_cancel_pact(other, player_number(pplayer),
+                                     CLAUSE_ALLIANCE);
+      } else {
+        /* We are in the same team as the agressor; we cannot break
+         * alliance with him. We trust our team mate and break alliance
+         * with the attacked player */
+        notify_player(other, nullptr, E_TREATY_BROKEN, ftc_server,
+                      _("Your team mate %s declared war on %s. "
+                        "You are obligated to cancel alliance with %s."),
+                      player_name(pplayer),
+                      nation_plural_for_player(pplayer2),
+                      player_name(pplayer2));
+        handle_diplomacy_cancel_pact(other, player_number(pplayer2),
+                                     CLAUSE_ALLIANCE);
+      }
+    }
+  }
+  players_iterate_alive_end;
 }
 
 /**