In Slokovia, the peasants have formed a religion based on Thor, while they are being terrorized by their own government. Their church is discovered by the Slokovian army, and they are all executed. Their death cries are heard by Heimdall, who reports it to Thor. In Asgard, Thor meets with Balder and the rest and decides that they will go to Slokovia. Their army is no match for the Asgardians and in Washington, Iron Man is summoned to the Pentagon, where he is told to try to reign in his former teammate. Iron Man goes to Asgard to try to talk to Thor about what he is doing, only to be told that it will continue, and Thor himself will oversee it personally.
Iron Man jets off toward Slokovia, when his communications is interrupted by Doctor Doom. Thor arrives in Slokovia just in time to see their army deploy nerve gas to try to stop the Asgardians, only to wind up harming their own people. Thor does away with the gas and begins to attack the army, when Iron Man appears in front of him, telling him that he will fight if he has to. Thor and Iron Man continue their standoff in Slokovia. Iron Man flies off, when Doctor Doom patches in and tells Iron Man they they should meet. Doom and Tony meet in Latveria, where Doom tells him that he should power a suit of armor with the Asgardian power source given to Tony. He tells Doom, that there is no such thing.
Meanwhile, Thor and Balder talk about how the Slokovian army still has not withdrawn, and on the news there are reports of anti-Thor groups popping up now, almost as fast as the pro-Thor groups. Back at Stark International, Tony arrives and he does indeed have a specialty suit of armor for taking on Thor - powered by the energy source given to him by Thor a few issues ago. But while they are discussing that, spies steal the plans and transport them to Doctor Doom. Iron Man, now in his Thor-buster armor, goes back and stands toe-to-toe with Thor. Using his power source to absorb and re-channel the energy used against him. As the army begins to move in, they are stopped by Captain America, who states that they are too far gone to stop now. And as mystic hammer collides with iron fist - an explosion devastates the surrounding area.
Cap, reeling from the blast of Thor and Iron Man clashing, remembers how he was frozen and it was the Avengers that found him. Now two of his best friends are fighting a battle of ideas. Cap talks to them and tries to get both of them to calm down, but Dr. Doom has provided the weapons to the Slokovians, and he still has remote control of them. He prods one of the weapons to fire a shot at Thor, which prompts him to command the Warriors Three, Balder, and Sif to attack.
Cap sends Iron Man to intercept the Soviet bombers that are on their way and jumps back into the fray to try again to talk sense into Thor. Thor casually backhands Cap away and into the oncoming American army. The C.O. tells Cap that he has orders from the president to move in, but Cap tells them to stand down and the soldiers obey Cap. Cap again jumps in and Thor strikes with all his fury, denting Cap's shield. Cap tells Thor that dropping a bomb on the problem won't change people's feelings. Thor relents and hammers the shield back into shape. Back at Avengers mansion Cap and Iron Man talk about the war, and how they only had one casualty, and look to Asgard floating above.
In Asgard, Balder tells Thor that there are still followers that pray for help and that they laid down their arms too readily. Thor tells them that Odin never knew mortals like the Avengers, and tells them all to leave. After they go, Thor looks at a picture, then drops it to the side broken - it's a picture of himself, Captain America, and Thor as they were so long ago.
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Links and References
Avengers: Standoff Reading Order Guide on How to Love Comics.