It looks like Israel isn't going to abide by any ceasefire in Lebanon and that seems to be ok with the United States. What's not clear is whether it's ok with Iran.
The statement from Pakistan's Prime Minister yesterday said:
With the greatest humility, I am pleased to announce that the Islamic Republic of Iran and the United States of America, along with their allies, have agreed to an immediate ceasefire everywhere including Lebanon and elsewhere, EFFECTIVE IMMEDIATELY. I warmly welcome the sagacious gesture and extend deepest gratitude to the leadership of both the countries and invite their delegations to Islamabad on Friday, 10th April 2026, to further negotiate for a conclusive agreement to settle all disputes. Both parties have displayed remarkable wisdom and understanding and have remained constructively engaged in furthering the cause of peace and stability. We earnestly hope, that the ‘Islamabad Talks’ succeed in achieving sustainable peace and wish to share more good news in coming days!
Israel PM Netanyahu said late yesterday that wasn't the case and the White House is saying the same. So far we don't have an official or public response from Trump but PBS journalist Elizabeth Landers said Wednesday that she had spoken with President Trump, who told her Israel's war with the Iranian-backed Hezbollah militia in Lebanon was "not included in the deal".
"They were not included in the deal. That will get taken care of too. It's alright," Landers quoted the president as saying. He said Israel continuing its attacks on Hezbollah was "part of the deal — everyone knows that. That's a separate skirmish."
France evidently didn't know that as President Macron said Lebanon must be included. Even Lebanon or at least Hezbollah thought it was included as it said it refrained from attacks afterwards only to be hit extremely hard by Israel.
Netanyahu is holding a press conference at the moment and is defiant, saying the ceasefire will not include Hezbollah and Israel "will continue to strike them."
Iran's foreign minister also just posted on X, highlighting the text from Pakistan's Prime Minister and said:
In terms of direct market impacts, Israel and Lebanon fighting is a non-factor. It only matters if Iran uses that as a reason to call off the ceasefire and continue to block the Strait of Hormuz. There are indications that's happening now but we aren't seeing so far a real breakdown.
I see three possibilities:
1) Israel continues to attack during this two week period (or sooner) and then stops with a larger deal
2) Iran accepts the ceasefire anyway and leaves Lebanon to fight for itself
3) The whole thing falls apart
The last scenario would be an ugly one and lead to even more escalation but the market doesn't think that will happen. I would love to hear something from Iran but announcing it publicly wouldn't be a good look domestically and Araghchi's comments don't sound like a guy who is trying to lay the groundwork for abandoning Lebanon.
