First of all, there seems to be a general misconception on how a challenge works. You do not attack individual characters. You attack a player.
This is how a challenge works in a simplified way -- for more details check the FAQ document (link in my signature).
1. First you declare what kind of challenge you want to make (military, intrigue, power) and against which opponent (in a multiplayer game).
2. Then you declare and kneel the character with which you want to attack during that challenge.
3. Then you may declare stealth on a number of your opponent's characters, depending on how many of your attacking characters have the stealth keyword (your opponent's characters with stealth cannot be chosen) -- the stealth targets cannot be declared as defenders by your opponent.
4. Your opponent declares and kneels the characters with which he would like to defend against your challenge.
5. You determine the challenge winner by comparing the total strength of the attacking characters against the total strength of the defending characters.
6. Settle claim, reward for unopposed, reward for renown, in this order.
I hope that helped. It's a bit more intricate than I presented it here, because it's missing all the opportunities for player actions, but I really recommend studying the FAQ document for that.