Ongoing US-Israel military strikes against Iran since late February 2026, including nearly 900 coordinated airstrikes targeting Iranian missiles, air defenses, and nuclear facilities, have escalated into open war, making diplomatic normalization impossible and driving trader consensus to an 88.5% implied probability of no Israeli embassy reopening in Tehran by year-end. Iran's April threats to target Israeli diplomatic missions if its own are attacked, coupled with retaliatory strikes on regional US assets and fragile ceasefire talks, underscore persistent hostilities absent any de-escalation signals or official statements hinting at restored bilateral relations. Historical enmity since the 1979 Iranian Revolution and proxy conflicts further solidify barriers, with traders pricing in low odds for reversal amid active combat.