Israel has issued a new demand that Lebanon dismantle Hezbollah’s military infrastructure before any Israeli withdrawal. This hardline stance contradicts the U.S.-brokered ceasefire, which only required Hezbollah’s disarmament south of the Litani River.
The condition has rattled prediction markets, which now show a significantly lower probability of a permanent peace agreement by June or July 2026. The conflict, which escalated after the 2023 hostilities and Israel’s 2024 invasion of Lebanon, remains volatile despite a tense ceasefire.
Israel’s strategic goal is the sustainable degradation of Hezbollah’s military capacity while establishing a defensive buffer zone. Analysts are closely watching the responses from Lebanon, Hezbollah, and the U.S. Department of State, as any diplomatic shift or military escalation could alter the outlook.