Will Israel-Hamas Ceasefire Phase II Complete by December 31?

Phase Two of the Gaza ceasefire is technically underway, but completing it by December 31 remains a long shot. US envoy Steve Witkoff declared Phase Two launched in January 2026. Six months later, the core disputes remain unresolved. The prediction market has priced this outcome at 23 percent, and that number tells you everything about where negotiations stand.

The market question asks whether Israel and Hamas complete Phase Two by December 31, 2026. YES contracts trade at $0.23, NO contracts at $0.77. Total volume stands at $2,765,041. The contract resolves at end of year.

How the Phase Two Contract Works

Phase Two resolution requires a completed, implemented agreement between Israel and Hamas on the second stage of the Gaza peace framework. That means full Israeli withdrawal from Gaza, governance transfer to a Palestinian technocratic committee, and a permanent end to hostilities. YES pays out if that agreement takes effect before December 31, 2026. Failing that condition, NO pays out.

• YES ($0.23): Phase Two is implemented before the December 31 deadline.
• NO ($0.77): Phase Two falls short of full implementation by year-end.

The NO position reflects a specific structural reality. Hamas has publicly rejected key Phase Two terms, calling Israeli demands for Hamas disarmament unacceptable. Hamas refuses to discuss Phase Two at all unless Israel fully implements Phase One terms first, and Phase One compliance remains contested on multiple fronts.

Market Signals: Volatility Without Conviction

Sponsored Partner

Momentum here is genuinely mixed. YES contracts dropped 13 percent in the last hour while gaining 22 percent over 24 hours. The trend score sits at 32.72, well below the midpoint. Together, those three signals describe a market that bounced hard on fresh news and is now giving back gains fast. Buying pressure from mid-week evaporated. A 22 percent daily jump with a sub-35 trend score and a 13 percent hourly reversal is deceleration, not breakout.

Volume tells a similar story. Total market volume is $2,765,041, a meaningful base. But 24-hour volume is only $793, meaning almost no fresh capital is entering this market right now. Liquidity sits at $14,601. The market is reacting to news cycles, not reflecting sustained conviction from either side.

• YES contracts fell 13 percent in the last hour after a 22 percent 24-hour gain, signaling a sharp fade of recent buying.
• 24-hour volume of $793 against $2.7 million total confirms this market is coasting on old positions, not new ones.
• Trend score of 32.72 keeps YES well below momentum thresholds associated with sustained price advances.
• Related markets offer useful context: the Netanyahu exit market prices at 47 percent, suggesting leadership instability adds another variable to any Phase Two timeline.
• The US-Iran conflict market pricing at 15 percent matters here. Regional escalation risk remains non-trivial and would freeze ceasefire talks entirely.

Lines Analysis: The Math on a Six-Month Finish

The 23 percent probability reflects a genuine but narrow path. Phase Two was formally announced in January 2026. The framework exists. Mediators from the US, Egypt, Qatar, and Turkey remain engaged. If Hamas and Israel narrow the disarmament dispute and the technocratic governance committee gains legitimacy, progress is possible before December. That path requires sustained diplomatic pressure from Washington and no major military escalation in Gaza or the wider region.

The NO side holds the structural advantage. Hamas has rejected disarmament demands explicitly. Israel has resisted Phase Two terms that require larger territorial withdrawals. The governance committee named under Witkoff’s plan, to be overseen by a Trump-led Board of Peace, still lacks full membership and authority. Each of those gaps is a potential negotiation breakdown. The December deadline gives six months. But with both sides far apart on core terms as of July 2026, six months may not be enough.

• Any Hamas statement accepting disarmament talks would push YES contracts sharply higher.
• A breakdown in mediator talks between the US, Egypt, and Qatar would push NO toward 90 percent.
• Netanyahu’s political standing, currently contested at a 47 percent exit probability, could reshape Israel’s negotiating position before year-end.
• A US-Iran escalation would freeze Phase Two entirely and collapse YES pricing.
• Accelerated governance committee appointments and aid flow improvements would signal Phase Two momentum and lift YES.

Total volume at $2,765,041 shows sustained market interest in this outcome. But the data favors NO. The 77 percent NO price reflects how many preconditions must align in a short window. The 23 percent YES price is not zero, and diplomatic breakthroughs can be fast when they come. Right now, the weight of evidence points toward incomplete negotiations at year-end.

LINES VERDICT

Phase Two Incomplete by December

Hamas publicly rejects disarmament terms, Israel resists full withdrawal commitments, and six months is a tight window for a framework with this many unresolved disputes.

What the market says: At 23 percent, the market sees Phase Two completion as possible but unlikely before December 31. With the end date still six months out, any diplomatic breakthrough could reprice this contract dramatically in either direction.