Ongoing US-Israel military operations against Iran since late February 2026, including hundreds of strikes on military and nuclear sites, have left bilateral relations at their lowest point in decades and eliminated any near-term prospect of normalized diplomatic ties. A fragile April ceasefire remains under strain from rejected US proposals on the nuclear program and Strait of Hormuz access, continued proxy clashes in Lebanon, and Israeli Prime Minister Benjamin Netanyahu’s public openness to Iranian regime change. With no bilateral talks, confidence-building measures, or normalization signals from either side, traders assign overwhelming probability against an Israeli embassy reopening in Tehran by year-end, consistent with the 47-year diplomatic freeze and the structural barriers posed by active conflict.