**Ongoing Israel-Lebanon talks center on a June 2026 U.S.-brokered trilateral framework for Israeli withdrawal from southern Lebanon, Lebanese Army deployment, and Hezbollah disarmament, yet full normalization remains distant.** Hezbollah has rejected the accord outright and refuses further disarmament ahead of Lebanon’s May 2026 parliamentary elections, while Lebanese officials and U.S. mediators describe broader diplomatic relations as premature or off the table. Recent direct negotiation rounds, including one in Rome in early August, focus on border security and prisoner exchanges rather than a peace treaty. Persistent Hezbollah military activity, implementation disputes, and Lebanon’s internal political constraints continue to limit progress toward the state-to-state recognition and diplomatic ties required for normalization before 2027. Traders price these structural and security barriers as the dominant factors sustaining the 92.5% implied probability against the outcome.