Shareholders searching for détente in the battle between Yahoo and Microsoft are unlikely to find it in Microsoft’s new proposal to buy Yahoo’s search business, one the Internet company swiftly rejected on Saturday.

The proposal made late last week represents a formal alliance between Microsoft, whose takeover efforts Yahoo had rebuffed for months, and the billionaire investor Carl C. Icahn, who is seeking to unseat Yahoo’s board. It also represents a newer, more hostile approach by Microsoft, in which the software giant is willing to team up with one of the most aggressive activist shareholders today. Among its requirements were the replacement of Yahoo’s board  and a response within 24 hours.

Microsoft’s muscular approach and Yahoo’s strong and quick rejection suggest that investors can expect a showdown at Yahoo’s annual shareholder meeting on Aug. 1.

“Microsoft and Mr. Icahn are trying to dismantle the company and deliver our search business to Microsoft on terms that would be disadvantageous to Yahoo stockholders,” Roy Bostock, Yahoo’s chairman, said in a statement. “We are prepared to let our stockholders, not Microsoft and Carl Icahn, decide what is in their best interests and we look forward to the upcoming vote.”