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King Richard I, of England, known as 'Lionheart', leads the Third Crusade to the Holy Land. A truce is declared between his forces and those of the Saracens under Saladin, just prior to the abandonment of the Crusade; and during this trucethe events of the present story take place. The "Talisman" itself is a pebble of wonderful healing powers carried by Saladin. Sir Kenneth, a Scottish Crusader, rides alone through the Dead Sea desert of Syria, when he is suddenly attacked by an Emir of the Saracens. The Scot is victorious and the two warriors declare a friendly truce. They ride together to the cave of Theodorick, a fanatic monkish recluse, who at first lays violent hands upon the Saracen, but finally receives them both hospitably. The Crusader is charged with a secret message to the hermit'from the Council of Princes; and while the Saracen sleeps, the knight and monk go to a neighboring chapel and witness a mass. Among the veiled worshippers is Lady Edith Plantagenet, whom the knight loves and under whose colors he has fought. She recognizes him by dropping a rosebud at his feet. The Saracen, who calls himself Ilderim, an Arabian physician, has heard that King Richard lies ill of a fever; and he thereupon states that he can heal the royal invalid ...