From 5 December 1941 with Rommel and events unfolding

The Italian High Command sent a staff officer to inform Rommel and General Bastico that supplies from 5 December 1941 to the end of the year would be very limited. The plan was to only send fuel, food, and medical supplies. Rommel only saw the officer, Lieutenant-Colonel Montezemolo a day later. Rommel, however, very likely had already been informed. Another major event was that Hitler was sending an "air fleet and defences" to the area to achieve air superiority and to protect shipping to North Africa. Rommel was thinking of a temporary withdrawal but with the prospect of a rebound in the new year.
Rommel then recalled the forces that had been sent to the frontier. They included the German Africa Corps and the Italian mechanized corps. The recall gave the 5th New Zealand Brigade a reprieve. The 90th Light Division was ordered back to the Ed Duda-Belhamed-Bir Salem area. The Italian Bologna Division was ordered to withdraw from the east during the night. Early on 5 December saw the two German armored divisions were in one case, three miles west of Ed Duda and the other was five miles west of El Adem.
By then, the German armor had been reduced to a total of fifty tanks. To take any action, they needed support from the Italian Ariete Division and Trieste Division. They were to move near Gubi and then attack British supply dumps. Rommel would have liked to move quickly, but the Italians were not able to respond very fast. Rommel lost patience and sent German divisions to El Gubi. In the process, they overran the 11th Indian Brigade. General Gott's usual operations allowed the 4th Amoured Brigade to leaguer 70 miles away, where they could rest undisturbed.
The XXX Corps attack on El Adem had to be postponed. The units in the vicinity of El Gubi were in a state of confusion. That applied to both German and British untis. They had been able to start to reorgamze the remnants of the 11th Indian Brigade, which was then withdrawn. The Germans followed them, moving towards the 2nd Guards Brigade. They were saved from being overrun when Rommel sent them a message ordering them to change over to a defensive posture. The British 4th Armoured Brigade was now close, northeast of El Gubi. They had set up a defensive position where they sat. They had an armored car screen out to provide warning. One thing that happened was that General Neumann-Silkow was fatally wounded. He had been the 15th Armored Division commander. The Germans and Italians were suffering under increased attack by British air and artillery.
Early on 7 December, General Ritchie had ordered XXX Corps to advance as soon as they could move. General Norrie should inform General Godwin-Austen of the plans. By now, General Gott was feeling cautious and told General Norrie that he thought that the Germans were firming up. General Norrie decided to sit still. Rommel was visiting the German Africa Corps headquarters early on 7 December. He told them that if they could not beat the British on the 7th, they would have to pull back to the Gazala area. Rommel did not make any plans to fight and instead, after dark, was going to pull back from the British and withdraw. Supply columns were actually withdrawn starting in the afternoon. As usual, at night on 7 to 8 December, the 4th Armoured Brigade set up a night leaguer southeast of El Gubi. This is based on the account in Vol.III of the Australian Official History.