Ongoing conflict with Hezbollah, including repeated ceasefire violations and drone incidents into August 2026, remains the dominant factor behind traders assigning a 92% probability against Israel-Lebanon normalization before 2027. A U.S.-brokered framework agreement signed in June 2026 established security zones, contingent Israeli withdrawals, and Lebanese Armed Forces oversight for Hezbollah disarmament, yet explicitly avoided diplomatic recognition or full bilateral ties. Lebanese officials and the United States have repeatedly described normalization as premature or off the table amid domestic political divisions and Hezbollah's rejection of the accord. Continued negotiations in Rome and elsewhere focus on border security and sovereignty enforcement rather than peace treaties or ambassadorial exchanges, reflecting structural barriers that traders view as unlikely to resolve within the remaining months of 2026.