Israel's Prime Minister Benjamin Netanyahu retreated from a threat to strike Hezbollah in Beirut after President Trump and the UN Security Council urged de-escalation. The apparent shift follows warnings that an escalation could jeopardize ongoing peace negotiations with Iran. Trump claimed Israel and Hezbollah had agreed to stop attacking each other, while Lebanon's government reported a new truce was taking shape.

Diplomats at the Security Council, with the exception of the US, called for Israel to withdraw its forces from Lebanon. Iran had made ending hostilities there a condition for peace talks with Washington. Two senior Iranian officials warned through intermediaries that negotiations would halt if Israel attacked southern Beirut, a Hezbollah stronghold.

The potential de-escalation comes as thousands of Beirut residents fled following Netanyahu's initial threat. Market analysts are watching closely, as sustained hostilities could disrupt energy markets and global trade routes. The fragile ceasefire remains dependent on Hezbollah honoring its commitment to stop attacks, with Netanyahu warning Israel will respond if the group continues targeting Israeli cities.