Ongoing hostilities from the 2026 U.S.-Israel military campaign against Iran, including strikes launched in late February, Iranian retaliatory missile and drone attacks, and a fragile ceasefire that broke down again in July, have left bilateral diplomatic ties at a historic low. No public statements, negotiations, or confidence-building measures between Israeli and Iranian officials point toward embassy reopening or normalized relations by year-end. Traders assign a 96.5% probability to “No” because the conflict’s unresolved core issues—nuclear program, ballistic missiles, and regional proxy dynamics—create prohibitive barriers. A sudden leadership change in Tehran, comprehensive U.S.-brokered agreement addressing all fronts, or verifiable de-escalation could theoretically shift odds, though no such developments have materialized in recent weeks.