When Vito said, “Until this day I never knew that it was Barzini all along,” we recognized that Barzini was Tattalglia/Sollozzo’s silent partner. I think there was much, much more to it:
Sollozzo was a top European and Middle Eastern drug wholesaler. He wanted to build a highly profitable retail sales/distribution network in the US. But he needed the permission and protection of the Five Families, as well as their financial, operational and political support. He knew the Corleones were on top, but he probably figured that Vito would be too conservative to go for his deal. So, I’m guessing, Sollozzo approached Barzini first. He knew Barzini was #2, and would see that the money he’d earn from a drugs deal with Sollozzo would help him push past Vito to become the top Mafia Don.
But Barzini had his own agenda:
I’m guessing that Barzini told Sollozzo that, while he was in favor of the drugs business, he couldn’t support Sollozzo openly: Vito would feel threatened if he saw his arch-rival, Barzini, tapping into this rich vein of money, and would work against Sollozzo. Instead, Barzini suggested that Sollozzo approach Tattaglia. Why? Because Vito wouldn’t see Tattaglia the pimp as a threat; and Tattaglia already had a network of hookers, pimps and whorehouses where drugs could be distributed. Barzini must have convinced Sollozzo that if Tattaglia provided the high-risk/high-profile operational support, Vito might give him money and political protection.
So, why did Barzini seemingly turn down this immense source of profits and give Tattaglia the chance to get rich (and powerful) quick? Because he knew that Vito wouldn’t want any part of the drugs business—especially if Tattaglia was involved. Vito, “notoriously straight-laced in matters of sex,” had no respect for Tattaglia and wouldn’t touch anything that Tattaglia was involved with.
Thus, Barzini was setting up a deal that he was pretty certain would fail. He knew Sollozzo, as a “man who respects himself,” would try to kill Vito. If he succeeded, Barzini would inherit the top spot. If he failed, the Corleones would blame the Tattaglias and declare war on them. Either way, Barzini would pick up the pieces. The other Dons would go along: neither Barzini nor the other Dons would dare to try to kill Vito on their own, but if Sollozzo was willing to take the risk, who’d complain? In fact, the failed attempt made Sollozzo desperate. I’m guessing that, in order to survive, he had to promise all the Dons a piece of the drugs action in order to get their support in the war against the Corleones.
Clever Barzini! Too bad he underestimated Michael.

that was very well thought out. you should make mafia movies/write mafia novels.

All very well said Turnbull.

I had just one quick thought - closer to a question actually. Although Vito's disdain for the distortion of sex is well known, do you think his personal feelings for Tattaglia really played that large a part in turning down Sollozo?

I believe in the end, Vito is a business man. He'll turn down the deal if the losses outweigh the gains. It certainly didn't help that Tattaglia was involved but I believe the only reason Vito turned down the Sollozo deal was that he would lose control - lose control of the politicians and police, while being in a business that he doesn't know very well...

I believe that Vito turned down the drug deal mainly for the business reason he cited: His friends in politics "wouldn't be friendly very long if they knew my business was drugs instead of gambling." But in the novel, after his conference with Sonny and Hagen before meeting with Sollozzo, he says to Hagen: "Do you have it in your notes that Sollozzo made his living before the war from prostitution, as the Tattaglias do now? Write it down before you forget." Hagen is dismayed and takes it as a rebuke: He now knows the Don is going to turn the deal down because "he was notoriously straight-laced in matters of sex."

The only reason Sollozzo made the attempt on Vito's life is because he saw that Sonny was interested. I don't think he would have gone after Vito had sonny kept his mouth shut. But one thing is certain. If sollozzo didn't have backing he would never had made the attempt.

In the novel it stated that Vito refused because of a prejudiced reason. But the movie its different.

You think The Turk tried to kill Don C. without at least the tacit support, and maybe more, of Barzini and Tattaglia?

I agree with BOB in his post above. I don't think there is any way That Sollozzo made this decision on his own.

How could he know for certain that the Barzini-Tattaglia alliance was willing to risk an all-out war with the Corleones over the drug business?

He would have had to check with Barzini first. If Barzini told him, "Well, too bad Virgil old pal. Looks like we're not going into the drug business", there's no way Sollozzo tries the hit. He'd be writing his own death warrant.

Remember Sonny's words to Tom (from the book, I think), something to the effect that to avoid a war, the other families have to "give me Sollozzo".

How did Sollozzo know they wouldn't?

I don't think this was a case of Barzini knowing that The Turk "would try to kill Vito."

More like Barzini knowing that Sollozzo would want to. Perhaps I'm splitting hairs here, but I think there is a difference.

And as Vito said, Barzini was in on it. All along.

OF COURSE Sollozzo woudn't try to kill Vito without support. That was part of Barzini's plan. As night follows day, Barzini knew that, when Vito rejected Sollozzo's offer, he'd come back to Barzini with a plan to kill Vito--and begging for his support. Thats when Barzini began tightening the screws: "Well, you're gonna have to give me something if you want my support in killing Vito." When the hit attempt failed, Barzini tightened the screws again, as I said.

I'm also sure that Sollozzo lost considerable face when he failed to kill Vito. Without Vito, Sonny would've been forced to make the deal with the other families, because he wouldn't have had his father's clout. By only wounding Vito, he forced the war. Until Vito could take over the reins again, Sonny was not able to make any permanent decisions. That's also why Michael had to kill Sollozzo. It wasn't strictly vengeance. It was also because the key to Barzini's plan was to eliminate Vito. Michael knew all along that Sollozzo would never stop his attempts on Vito's life, and therefore he had to be eliminated.

Sollozzo would have killed Vito in any case regardless of anything Sonny said. He originally came to Vito for the help he asked for because he was the only Don who could supply it. However, he also realized that Vito was a huge impediment to him that could only be overcome by his death.