Diplomatic normalization with Israel has seen limited momentum since the Abraham Accords, with trader sentiment reflecting few expected new recognitions by year-end amid persistent regional tensions. Key holdouts such as Saudi Arabia continue to condition any formal ties on concrete progress toward Palestinian statehood, a stance reinforced by domestic opposition and unchanged despite U.S. diplomatic efforts through mid-2026. Broader factors include post-ceasefire dynamics from the 2023-2025 Gaza conflict, the 2026 Iran-related security shifts, and the reluctance of other Organization of Islamic Cooperation members like Indonesia and Pakistan to advance relations. Existing partners have maintained ties without expansion, while U.S. pushes for additional Abraham Accords signatories have not yielded verifiable breakthroughs. Any late-year developments would likely require shifts in Palestinian negotiations or major security realignments.