Ongoing disagreement over sequencing has stalled Phase II implementation of the October 2025 US-brokered ceasefire framework. Israel insists on full Hamas disarmament and verifiable weapons handover before further withdrawals or governance changes, while Hamas and mediators favor linked, phased steps tied to Israeli pullbacks, an international stabilization force, and reconstruction. Limited Israeli strikes continue, with forces controlling roughly 70 percent of Gaza territory. In July, Hamas accepted a 15-point roadmap for gradual demilitarization, but Prime Minister Netanyahu rejected the sequencing. As of mid-October 2026, US envoys pressed Netanyahu on advancing Phase II elements including Rafah crossing operations and hostage remains recovery, ahead of Israeli elections on October 27 that could influence negotiating flexibility. Trader sentiment reflects these persistent barriers alongside diplomatic momentum from mediators.