The Siege of Esthar is named for the battle that ensues in Esthar City after the G-Army commandeers the Lunatic Pandora through the city en route to Tears' Point to incite Lunar Cry. Esthar is led by its president while leadership of the Galbadian Army has been taken over by Seifer Almasy under instruction from Sorceress Ultimecia.
The involvement of the SeeD mercenary forces is coincidental due to a task group being caught in Esthar during the events.
The events leading up to the siege trace back to the Battle of the Gardens where Sorceress Edea, possessed by Ultimecia, attempted to defeat the Balamb Garden SeeD forces. Upon Edea's defeat she relinquished her sorceress power to Rinoa Heartilly, whom Ultimecia possessed. Via her new host Ultimecia instructed Seifer to retrieve the Lunatic Pandora and direct it to Esthar where it could initiate the Lunar Cry. After this, Rinoa fell into a coma.
The Siege of Esthar occurs within the borders of the Esthar continent to the east of Galbadia.
Concerned for her safety, Rinoa's friends—a SeeD group led by Squall Leonhart—travel to Esthar to find Ellone whom they believe can cure Rinoa. Edea accompanies them, believing that the Estharian sorceress expert Dr. Odine may be able to remove her sorceress power to avoid being possessed by Ultimecia again.
Entering the continent via the Horizon Bridge the group crosses the Great Salt Lake before happening upon a panel in a camouflage wall that allows access into Esthar City. After receiving an audience with Dr. Odine, Squall is sent with Rinoa to the space station Lunar Base to see Ellone.
Shortly after Squall's departure the Lunatic Pandora, salvaged by Seifer Almasy and the Galbadian Army, enters Esthar air space. As the weapon crosses the city the remaining SeeD mercenaries, led by Zell Dincht and accompanied by Edea, attempt to board the construction but are rebuffed. Unable to do anything they watch as the weapon positions over Tears' Point.
Squall boards the Lunar Base with Rinoa, leaving her in the medical facility. He is escorted by Piet to the control room where they witness the massing of monsters upon the moon's surface, which is the beginning of the Lunar Cry. After a brief conversation with Ellone an alert sounds out for a security breach in the medical facility.
Rinoa, under zombie-like possession by Ultimecia, has broken out of the facility and makes her way to the control room and deactivates the security locks on Sorceress Adel's tomb. As Squall chases after her, it becomes apparent the Lunar Cry would envelope the Lunar Base and evacuation procedures begin. As the Lunar Cry erupts from the moon toward the planet the sea of monsters engulfs the unsealed Sorceress Adel and the Lunar Base, bringing both down to the planet. While the Lunar Base is destroyed Adel's Tomb survives and lands inside the awaiting Lunatic Pandora. Meanwhile, the G-Army within the Lunatic Pandora grows discontent and disorganized due to Seifer's bad leadership and the monstrous allies he employs.
With the Lunar Cry monsters invade Esthar and the city is overrun with only small pockets remaining protected by Estharian guards.
President Loire of Esthar and Dr. Odine devise a plan to defeat the Galbadians and stop Ultimecia's plan of time compression. The first part of the plan is to find and rescue Ellone, who had been kidnapped after escaping from the Lunar Base and lay somewhere inside the Lunatic Pandora.
The second is to defeat Sorceress Adel, who would be forced to transfer her powers to the now recovered Rinoa. Rinoa would allow herself to be possessed by Ultimecia by which time Ellone would send them both back through time, initiating the time compression and allowing the SeeD group to travel through time to where Ultimecia resides and confront her.
The SeeD board the Lunatic Pandora and find that part of its crew (including Lieutenant Biggs and Private Wedge) is in open mutiny and attempts to desert. Seifer lacks control even over his most loyal henchmen. Nevertheless, the SeeD meet resistance from robotic weapons aboard the Lunatic Pandora, and from Sorceress Adel.