By the Treaty of Frederiksborg or Copenhagen on 3 July 1720 peace was also signed between Denmark and Sweden, Denmark retroceding Rügen, Further Pomerania as far as the Peene, and Wismar to Sweden, in exchange for an indemnity of 600,000 Riksdaler, while Sweden relinquished her exemption from the Sound tolls and her protectorate over Holstein-Gottorp.
The decision of Canut that had to be accepted by Anastasia favoured the Rugian demands, only the trans-Peene terrae Wolgast, Lassan and Ziethen were put under Pomeranian control with the larger part of the disputed area, including the terrae Lositz (Loitz) and Wostrose (Wusterhusen), remaining within Rügen.
The castellany is thought to have comprised the area between the rivers Peene and Zarow, and the villages Rehberg, Japenzin, Iven, Crien, Wegezin, Thurow, Blesewitz and Görke.
The retreating Wehrmacht had blown up the bridges over the Peene and Tollense rivers, which enclosed the town to the north, west and south, thus blocking the Red Army's advance and trapping the remaining civilians.
Thanks to its wilderness and intact nature, the river Peene and its valley is often referred to as "the Amazon of the North".