Israel Rejects the US-Iran Deal Before It Is Even Signed

The US-Iran deal is already cracking before it is signed. Hours after the G7 lined up behind it, Israeli ministers said the agreement does not bind them and vowed to keep fighting Hezbollah and stay in Lebanon, Syria, and Gaza indefinitely. The deal is due to be signed Friday. Israel is not on board.

This is the fault line nobody resolved at Evian. The US-Iran framework, which the G7 endorsed Wednesday, is meant to end the war, reopen the Strait of Hormuz, and lift sanctions. But Iran insists the deal requires Israeli forces to leave Lebanon, and Israel flatly refuses. Two sides reading the same agreement in opposite ways. That gap was papered over for the summit. It is open again now.

Israel's National Security Minister Itamar Ben-Gvir put it bluntly: Trump's agreement does not bind us, adding that Israel is not subject to the United States. The Defense Minister said the military will stay in security zones in Lebanon, Syria, and Gaza indefinitely and will not give up captured territory or stop dismantling Hezbollah. Tehran, for its part, says Israeli withdrawal from Lebanon is a condition of the deal it expects to sign this week. Inside Israel, much of the anger is aimed at Netanyahu, with critics across the spectrum calling the deal a disaster.

Markets had been trading the peace. The cracks are new. Oil sat near three-month lows on Wednesday, Brent around 79 dollars and WTI near 75, as traders priced in Iranian barrels coming back. That move assumes the deal holds and Hormuz reopens cleanly. An Israeli escalation in Lebanon is exactly the scenario that could snap the war premium back into crude. For now oil stayed lower, but the risk just got louder.

The question is leverage. Can Washington force a deal on an ally that says it is not bound by it? If Israel keeps operating in Lebanon, Iran could call the agreement void, and the Friday signing the G7 just celebrated starts to look shaky. The other side: Trump has spent enormous capital on this and may lean hard on Netanyahu to fall in line. Either the US pulls Israel along, or the deal that calmed oil markets gets a lot less certain.

So the war may be paused, the politics are not. A deal the G7 backed, that Iran expects to sign Friday, that Israel says does not apply to it. The signing is two days out. Whether it survives contact with Lebanon is the thing to watch. Loud start to Thursday.