On 1 November, Imre Nagy received reports that Soviet forces had entered Hungary from the east and were moving towards Budapest. Nagy sought and received assurances (which proved false) from Soviet ambassador Yuri Andropov that the Soviet Union would not invade. The Cabinet, with János Kádár in agreement, declared Hungary's neutrality, withdrew from the Warsaw Pact, and requested assistance from the diplomatic corps in Budapest and Dag Hammarskjöld, UN Secretary-General, to defend Hungary's neutrality. Ambassador Andropov was asked to inform his government that Hungary would begin negotiations on the removal of Soviet forces immediately.
On 3 November, a Hungarian delegation led by the Minister of Defense Pál Maléter was invited to attend negotiations on Soviet withdrawal at the Soviet Military Command at Tököl, near Budapest. At around midnight that evening, General Ivan Serov, Chief of the Soviet Security Police (KGB) ordered the arrest of the Hungarian delegation, and the next day, the Soviet army again attacked Budapest.
In total there were approximately 2,100 local revolutionary and workers councils with over 28,000 members. These councils held a combined conference in Budapest, deciding to end the nationwide labour strikes and resume work on 5 November, with the more important councils sending delegates to the Parliament to assure the Nagy government of their support.
With most of Budapest under Soviet control by 8 November, Kádár became Prime Minister of the "Revolutionary Worker-Peasant Government" and General Secretary of the Hungarian Communist Party. Few Hungarians rejoined the reorganised Party, its leadership having been purged under the supervision of the Soviet Praesidium, led by Georgy Malenkov and Mikhail Suslov.
Imre Nagy along with Georg Lukács, Géza Losonczy, and László Rajk's widow, Júlia, took refuge in the Embassy of Yugoslavia as Soviet forces overran Budapest. Despite assurances of safe passage out of Hungary by the Soviets and the Kádár government, Nagy and his group were arrested when attempting to leave the embassy on 22 November and taken to Romania.