Ongoing U.S.-brokered diplomatic contacts between Israel and Lebanon, which began in April 2026 and produced a 45-day ceasefire extension through mid-June, focus on border security, Lebanese state authority in the south, and Hezbollah disarmament rather than formal diplomatic ties. Lebanese Prime Minister Nawaf Salam has stated that Beirut seeks stability and peace but explicitly rules out normalization or recognition of Israel. Constitutional barriers in Lebanon, Hezbollah’s opposition, and repeated ceasefire violations sustain uncertainty about reaching an agreement by the end of 2026. These factors underpin traders’ consensus that full normalization remains unlikely within the resolution window.