Coral reefs are in global decline, with coral diseases increasing both in prevalence and in space, a situation that is expected only to worsen as future thermal stressors increase. Through intense surveillance, we have collected a unique and highly resolved dataset from the coral reef of Eilat (Israel, Red Sea), that documents the spatiotemporal dynamics of a White Plague Disease (WPD) outbreak over the course of a full season. Based on modern statistical methodologies, we develop a novel spatial epidemiological model that uses a maximum-likelihood procedure to fit the data and assess the transmission pattern of WPD. We link the model to sea surface temperature (SST) and test the possible effect of increasing temperatures on disease dynamics. Our results reveal that the likelihood of a susceptible coral to become infected is governed both by SST and by its spatial location relative to nearby infected corals. The model shows that the magnitude of WPD epidemics strongly depends on demographic circumstances, under one extreme, when recruitment is free-space regulated and coral density remains relatively constant, even an increase of only 0.5°C in SST can cause epidemics to double in magnitude. In reality, however, the spatial nature of transmission can effectively protect the community, restricting the magnitude of annual epidemics. This is because the probability of susceptible corals to become infected is negatively associated with coral density. Based on our findings, we expect that infectious diseases having a significant spatial component, such as Red-Sea WPD, will never lead to a complete destruction of the coral community under increased thermal stress. However, this also implies that signs of recovery of local coral communities may be misleading, indicative more of spatial dynamics than true rehabilitation of these communities. In contrast to earlier generic models, our approach captures dynamics of WPD both in space and time, accounting for the highly seasonal nature of annual WPD outbreaks. 