Unable to install iOS 26.5 update

How old is that download file? I wonder if it is from a previous iOS release and and cannot get permission from Apple to install now that a newer version has been released. If it is an old file, delete it and then start the update again so it gets the current version.

This support article has instructions about updating an iPhone or iPad wirelessly --> Update your iPhone or iPad - Apple Support Read the article for recommended criteria for being able to use wireless updating.

You can also use Mac and PC computers to update system software --> Update iOS on iPhone - Apple Support

Make sure you meet each and every one of these update requirements outlined below.

• Make sure you are on a strong Wi-Fi or 5G connection. 
• Make sure your iPhone is plugged in, above 20% battery, and Low Power Mode is off.
• Make sure you have at least 10 GB of free storage, more is better. 
• Make sure Airplane mode is turned off.
• Delete any VPN’s, security software add on's, or ad blockers.
• Make sure you are not on Beta software or a beta update waiting to be installed.

If the update still fails, as stated try updating with your computer. It is often more reliable since it bypasses the connection of your iPhone, which if it is unstable can hinder the update. You can use either a Mac or a PC, and if you don't have one, borrow one at an Apple Store or a friend. Update using your computer

Delete the downloaded file, restart your device and try to update again. How much available storage space on your iPhone?

See if anything in this article might be pertinent:

If your iPhone or iPad won't update - Apple Support