The militant faction of Pilgrims controling the Alliance was not satisfied with Terrans from Earth reaching their interstellar sphere, believing it violated the Treaty of Luna. They assembled a fleet at Beacon and mounted a massive assault to destroy the Port of Titan station which was the main base of their colonization effort. They prepared for a quick, surgical assault expecting a primitive and unprepared target. However the Battle of Titan (2631) was not what they expected as the Confed proved strong and prepared for anything. After 3 days of conflict around Saturn, they retreated. The Confed offered a new round of negotiations but was ignored.
The Pilgrims began an aggressive guerrilla action into Confed space, attacking colony worlds and disrupting shipping. After the destruction of the military outpost and minig colony on Celeste (2632), the Confed formally declared war against the Alliance.
The Alliance experienced early successes and proceeded against the more remote colonies, subjugating and enslaving Confed colonials on conquered worlds by the millions.
During that time, the Confederation adopted an aggressively defensive policy and did not attempt to liberate captured worlds. Its industrial resources were mobilized into assembling a massive invasion force in the Sol System for a coordinated attack against the core of the Alliance. Over the course of five months (2633-4) the Grand Fleet conquered Centauri, Sirius, Cygnus, Frase, and Bradshaw.
The Pilgrims were desperate and staked everything on an all-or-nothing defense of Peron agricultural colony in the Luyten system. The Peron Massacre lasted for seven months, while each side mounted increasingly brutal sorties and counter offensives to find some crack in the other's defenses. The remnants of the Grand Fleet were reinforced by a new strike force almost half again the size of the original and in 2 weeks of fighting Peron's defenders were overwhelmed.
The Confed joint fleets jumped into Beacon system where they were offered the Pilgrims' surrender. Asking for the safety of Pilgrim civilians and some limited rights for non-military Pilgrim worlds and their spiritual center, they offered to immediately stand down their military and dissolve the Alliance government.
After six weeks of negotiations, peace accords were signed at Cygnus; the Alliance officially ceased to exist and its worlds were absorbed by the Confed as protectorates.