Israel views united Jerusalem as its capital, while the Palestinians see the east of the city, captured by Israel during the 1967 Middle East war, as the capital of a future Palestinian state.
Private businessmen will still try to scale real-sector trade between their countries, and ties will remain cordial at the official level, including at multilateral fora on Afghanistan and other issues of shared interests.
Pakistan's economy has long been grappling with structural issues, fiscal mismanagement, and stagnant growth. Unemployment, inflation, and a lack of foreign investment have further exacerbated the economic strain.
Adding to the mounting tension, Independence Day witnessed an unexpected surge of PTI supporters taking to the streets, brandishing PTI flags in a powerful display of solidarity with Imran Khan.