**Ongoing hostilities with Hezbollah, Lebanon's dominant non-state armed actor, and the preliminary nature of a June 2026 U.S.-brokered trilateral framework agreement continue to anchor trader expectations against full normalization before 2027.** The framework, signed in Washington, establishes mutual recognition of sovereignty, pilot zones for limited Israeli redeployment tied to Lebanese Armed Forces control, and a sequenced path to ending conflict only after verified Hezbollah disarmament—conditions Hezbollah's leadership has rejected outright as unacceptable. Israeli officials have stressed retention of security positions in southern Lebanon until threats are eliminated, while implementation remains performance-based with no fixed timeline. With roughly three months remaining and no diplomatic breakthroughs or Hezbollah buy-in reported since the accord, traders view comprehensive normalization—formal diplomatic ties, embassies, and open relations—as facing steep structural and political obstacles in the narrow window.