The Third Crusade, which was also known as the Kings' Crusade, was mainly trying to capture the Holy Land from Saladin. Gregory VIII, the new pope, did not try to have the church lead the crusade. Instead he had Archbishop Joscius of Tyre go directly to France to appeal to the kings. Saladin knew that Richard's objective was to capture Jerusalem so Saladin followed Richard very closely. The final treaty was signed on September 2, 1192 and Jerusalem was to stay in Muslim hands.

A Privilege Granted by Pope Eugenius III
"Moreover, by the authority vested by God in us, we who with paternal care provide for your safety and the needs of the church, have promised and granted to those who from a spirit of devotion have decided to enter upon and accomplish such a holy and necessary undertaking and task, that remission of sins which our predecessor Pope Urban instituted. We have also commanded that their wives and children, their property and possessions, shall be under the protection of the holy church, of ourselves, of the archbishops, bishops and other prelates of the church of God. Moreover, we ordain by our apostolic authority that until their return or death is fully proven, no law suit shall be instituted hereafter in regard to any property of which they were in peaceful possession when they took the cross.
Those who with pure hearts enter upon such a sacred journey and who are in debt shall pay no interest. And if they or others for them are bound by oath or promise to pay interest, we free them by our apostolic authority. And after they have sought aid of their relatives or lords of whom they hold their fiefs, and the latter are unable or unwilling to advance them money, we allow them freely to mortgage their lands and other possessions to churches, ecclesiastics or other Christians, and their lords shall have no redress.
Following the institution of our predecessor, and through the authority of omnipotent God and of St. Peter, prince of the Apostles - which is vested in us by God - we grant absolution and remission of sins, so that those who devoutly undertake and accomplish such a holy journey, or who die by the way, shall obtain absolution for all their sins which they confess with humble and contrite heart, and shall receive from the Remunerator of all the reward of eternal life."

Source:Dana C. Munro, "Urban and the Crusaders", Translations and Reprints from the Original Sources of European History, Vol 1:2, (Philadelphia: University of Pennsylvania, 1895), 12