**Ongoing U.S.-mediated talks between Israel and Lebanon have produced ceasefires and a June 2026 framework agreement focused on security measures, Israeli withdrawals from southern zones, Lebanese army deployments, and Hezbollah disarmament under international oversight.** These steps address border security and a cessation of hostilities but stop short of establishing formal diplomatic relations, such as embassies or normalized bilateral ties. Lebanese Prime Minister Nawaf Salam and other officials have repeatedly stated that full normalization lies outside the current agenda and would require broader Arab consensus, including progress on the Palestinian issue under the 2002 Arab Peace Initiative. Hezbollah has rejected key elements of the deals and continues low-level violations, including recent drone incidents. Domestic political divisions in Lebanon, the short remaining timeline through December 2026, and the absence of any announced normalization framework sustain trader consensus on the low likelihood of an official diplomatic announcement before the market resolves.