Was Operation Kugelblitz really a success for the partisans?

Short answer

Operation Kugelblitz (2nd to 18th December, 1943 - the Wikipedia end date Jan 1944 is wrong) was, at best, a short-term success for the Germans and thus no more than a temporary set back for the partisans. The Partisans not only continued to be a viable fighting force but also quickly regained control of much that was lost, in addition to increasing recruitment.

The objective of the operation was to encircle and destroy the Partisan units in eastern Bosnia. While they appear to have inflicted moderate to heavy losses on the Partisans and to have gained control of much of eastern Bosnia, most of the Partisans escaped and German control was short-lived.

On casualties, it is impossible to determine the true numbers from the available sources. However, the number of casualties seems to have been inflated by the inclusion of both civilians and captured renegade Italian soldiers. Also, German records include estimated dead.

Operation Kugelblitz: success or failure?

The article German Antiguerrilla Operations in the Balkans (1941-1944) from the US Army Center of Military History provides this summary:

Major anti-Partisan operations planned for late 1943 included KUGELBLITZ, SCHNEESTURM, and HERBSTGEWITTER. The first of these, executed by the V SS Mountain Corps, had as its purpose the destruction of the Partisan units in eastern Bosnia. The German troop units had to comb too large an area to be thorough, however, and the bulk of the Partisan force slipped through their narrowing ring. The Partisans suffered 9,000 casualties in the course of the operation, and were immediately pursued in Operation SCHNEESTURM, twin drives to the west and northwest. Concluded by the end of December, SCHNEESTURM cost the Partisans an additional 2,000 men. Though badly battered in these operations, the major Partisan units retained their cohesion and Tito's Army of National Liberation could still be considered an effective fighting force.

The Axis History article Operation "Kugelblitz" (1943-12-02) offers this, not incompatible, summary:

The initial fighting occurred in the Prijepolje – Pljevlja area in Sandjak and then gradually farther north into the area east of Sarajevo. The Partisans admit to very heavy losses in the first few days of the operation at the hands of the 1. Gebirgs-Division and the attached “Brandenburgers”. But after the initial clashes, the Partisans dispersed and moved to the flanks of the encirclement and thus avoided a frontal attack. The [sic] eventually passed through the cordon and escaped into the mountains.

The Balkan War History site again paints a similar picture to the above:

German forces managed to inflict blows and inflict significant losses to some units of the Second Proletarian and the Fifth Krajina Division and managed to conquer the cities and communications in this area, but failed in the primary intent to break and destroy. Therefore, their success was short-lived, and the Partisan units after the devolution of German forces in late December 1943 and in January 1944 re-mastered much of this territory.

Jozo Tomasevich, in War and revolution in Yugoslavia: 1941-45 (Stanford University Press, 2002), highlights the fact that Kugelblitz was one of a series of operations and provides this assessment of Kugelblitz, Schneesturm,Ziethen, Herbstgewitter, Panther, Delphin, Merkur, Waldrausch, and Weihnachtsmann:

Though the Germans inflicted many losses on the Partisans and forced them to yield territory, the tide was turning in their favor. Manpower losses were offset by the influx of new volunteers and territorial losses by the recapture of old or the acquisition of new territory elsewhere. The Italian surrender not only greatly increased the number of new Partisan recruits and vastly improved their supply lines, but also greatly strengthened them psychologically.

Strength and Casualties

Far more contentious and uncertain are numbers, both forces involved and casualties. There seems to be no good reason to doubt the number of German troops involved (70-75,000), but the widely-cited Partisan number of 10-12,000 seems impossible to verify (and simply impossible if their casualties were 9,000, but with most escaping encirclement).

Thus, either or probably both the numbers of Partisan forces and casualties must be wrong. One possible explanation is that it seems that the Partisan numbers may refer to troops in just one area; this German communication dated 13 December 1943 refers to 8 to 10,000 Partisans in "the region of Rogatica - Javor-planina - Sokolac", but there is no mention of Partisan strengths in other regions. Unfortunately, the actual numbers are never likely to be known.

German records, cited by Axis History, state that German and Bulgarian losses are unknown while Partisan losses were as follows:

• 2,280 counted dead
• a further 2,000 estimated dead
• 2,330 captured
• 1,900 renegade Italian soldiers taken prisoner

As rs.29 mentioned in a comment below, the 9,000 Partisan casualty number may be at least partly explained by how the Germans counted casualties:

Germans as a rule counted killed civilians, whom they deemed as partisan collaborators, among enemy casualties

For German casualties, the Balkan War History site states that these

amounted to 106 dead, 535 injured and seven missing.

but no source is given for these numbers. Given that the fighting lasted around two weeks in winter conditions, these numbers must be taken with a very large pinch of salt.

The various Wikipedia pages in different languages only muddy the waters further. The Serbian and Serbo-Croat pages both put partisans casualties at 2,700 and German as unknowm: neither page provides a source. The Spanish page gives 3,700 for partisan casualties with German unknown; the source for the former is Narváez Torregrosa & Daniel Carlos, La derrota del III Reich a través del cine (The Defeat of the Third Reich through Cinema). The Italian page switches the data of the Serbian and serbo-Croat sites, giving 2,700 as the number of German casualties and Partisans unknown.