First of all, his grandfather, Fulk d’Anjou, was King of Jerusalem. He had turned over French his inheritance to his son Geoffrey in order to go to the Holy Land and marry the heiress to the Kingdom of Jerusalem, Melisende. Thus Henry's father, Geoffrey d’Anjou, was half-brother to Kings Baldwin III (reigned 1143 – 1162) and Amalaric I (1162-1174) of Jerusalem. Henry II himself was first cousin to the ill-fated Baldwin IV of Jerusalem (King 1174-1185) and both his sisters, Sibylla (Queen of Jerusalem 1186-1190) and Isabella (Queen of Jerusalem 1190 -1204.)
By 1184, the situation in the Holy Land had deteriorated dramatically. Baldwin IV of Jerusalem was dying, and his co-king Baldwin V, the young child of his sister, was also sickly. The next obvious candidate to succeed Baldwin IV was his sister Sibylla, but she was married to a completely unsuitable man, Guy de Lusignan. The King of Jerusalem therefore took the desperate measure of sending the Masters of the Hospital and Temple along with the Patriarch of Jerusalem to the West with an unusual plea. He did not ask for a new crusade, as so often in the past. Instead his emissaries took with them the keys to the Tower of David and the Holy Sepulcher -- the symbols of secular and sacred power in Jerusalem. Their mission was to convince the Western rulers to send not an army but a prince -- someone to step into the dying king's footsteps.
Henry's reaction is again used as evidence of his reluctance to crusade, and the Patriarch of Jerusalem bitterly accused Henry of duplicity and procrastination. Certainly, he failed to answer the call and forbade his youngest son John from going on crusade as well. Yet Henry himself had put the question to his barons of whether he was to be King of England or Jerusalem because he could not be both. There is nothing inherently deceitful about putting England (Normandy, Anjou and Maine) ahead of distant Jerusalem. Henry was no longer at the peak of power. He was fighting for his survival and that of his "empire."
Hans Eberhard Mayer makes the point that the Grand Master of the Temple made the decision to break into King Henry's treasure without the permission of the English King. He further suggests that it was fear of the great Angevin's wrath that forced Guy de Lusignan's hand at Hattin. Having effectively stolen King Henry's treasure, Guy de Lusignan (or at any rate the Templar Master, who had violated the Templar's code of trustworthiness) needed a victory to justify such an unprecedented act. Mayer writes:
"The opening of Henry's treasure gave the Templar master a disproportionate influence on the king. But what counted more was the predictable wrath of Henry II when he learnt about the opening. It could be justified, and Henry's wrath cooled, only by a spectacular success ....[A]lready at the time when the army was assembled, precautions had been taken to pacify Henry when the King of Jerusalem ordered that the soldiers hired with English money should fight under the English flag. The hoped for success was to be presented to Henry as being due largely to his money, but first there had to be success at practically all costs." (Hans Eberhard Mayer, "Henry II of England," Kings and Lords in the Latin Kingdom of Jerusalem, Variorum, 1194, p. 737.)