Ongoing hostilities, Hezbollah’s explicit rejection of the June 2026 U.S.-brokered trilateral framework agreement, and Lebanese officials’ repeated statements that the country remains far from diplomatic or economic ties with Israel have anchored trader expectations against normalization by December 31, 2026. The framework centers on ceasefire enforcement, Israeli withdrawal from southern Lebanon, Lebanese Armed Forces deployment, and Hezbollah disarmament under international oversight, yet the group declared the deal null and continues threats of disruption. Lebanon’s prime minister and president have conditioned any broader peace on a regional Arab framework, while internal divisions, Hezbollah’s entrenched military position, and constitutional constraints limit rapid progress. Recent August 2026 talks on verification mechanisms for disarmament and protests in Beirut against normalization further underscore these barriers, sustaining the 92% implied probability for “No.” Full implementation or a wider regional breakthrough could still alter the trajectory before year-end.