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ETA underwent some organisational changes, not least the creation of an Activism Branch of about thirty men under Javier ‘El Cabro’ (the Goat) Zumalde, who took to the mountains to wage armed struggle. This was untypical as most ETA terrorists operated within a five - to twenty-kilometre radius of their homes, and did a regular job in between attacks that occurred at half-yearly intervals. Other commandos were created to rob banks, although the first attempt in September 1965 resulted in the arrest of most of the robbers. Armed robberies and shootouts became more frequent in 1965-8, though only one person was killed as opposed to several wounded in what invariably became gun-fights. On 7 June 1968 a car carrying ETA militants was stopped at a Guardia Civil roadblock set up in a village called Aduna. One of them shot dead a Guardia Civil called José Pardines before fleeing into another checkpoint where the Guardia Civil dragged Txabi Etxebarrieta from the car and shot him beside the road. His accomplice, Inaki Saraskueta, escaped, but was captured, tortured and jailed for life. Etxebarrieta’s death was the pretext for commemorative masses, demonstrations and riots in the streets of Bilbao, San Sebastian, Eibar and Pamplona. St Txabi became a magnet for future recruits.

ETA decided to capitalise on these disturbances, seeking to provoke the reaction that would convert demonstrations into an uprising. On 2 August 1968 ETA gunmen murdered police commissioner Melitón Manzanas, a man not known for his charitable treatment of suspected terrorists, as he returned home to his house in Iran. Partly because it was raining heavily no one could positively identify the killers. Franco responded by declaring a state of emergency in Guipúzcoa province, which in January 1969 was extended to Spain as a whole. About two thousand people were arrested in the Basque provinces, including Gregorio López Irasuegui and his pregnant wife Arantxa Arruti, a couple suspected of involvement with the murder of Manzanas. Despite her condition, Arruti was tortured by the police, which caused her to miscarry. Her husband, who had been released without charge, was recaptured when he and a colleague tried to break into the prison in Pamplona to liberate her. Ballistics experts established that the Czech machine pistol his accomplice carried matched the weapon used to shoot commissioner Manzanas. This sequence of events led to the arrest of several ETA leaders, including two Catholic priests who belonged to the illegal group. Further raids netted virtually most of the rest, although José María Eskubi managed to flee to France joining Krutwig in exile.

The Franco government used a military tribunal to try the so-called Burgos Sixteen of major ETA figures. Prosecutors asked for six death sentences and aggregate jail sentences of seven hundred years, demands which focused national and international attention on the proceedings. The accused endeavoured to politicise the six-day trial by dismissing their lawyers and reading out calls for Basque self-determination, demands punctuated with revolutionary songs. The military judges flourished their ceremonial sabres. Beyond the courtroom, there were riots in Basque cities that led to ugly clashes with the police, and ETA kidnapped Eugen Beihl, the honorary West German consul in San Sebastian. This was designed to influence the sentencing process after the tribunal had found all of the defendants guilty with the exception of Arruti. A few countries broke off diplomatic relations with Spain, while requests for clemency came from pope Paul VI and Jean-Paul Sartre. The painters Joan Miró and Antoni Tápies joined three hundred Catalans in locking themselves in Montserrat’s monastery by way of protest. Biehl was released four days before the sentences were read out. Six men were sentenced to death, and the rest to 341 years in prison. On 30 December Franco commuted the death sentences to thirty-year jail