Set the Instant Pot to sauté mode and heat the olive oil. Add the diced onion and minced garlic and cook for 2 minutes until the onion softens.
Add the sliced bell peppers and cook for another 2 minutes, stirring often.
Add the lamb cubes and brown them on all sides, about 4 minutes total.
Stir in the smoked paprika and saffron threads, then pour in the chicken broth and diced tomatoes. Season with salt and black pepper.
Cancel sauté mode, secure the lid, and set the Instant Pot to manual high pressure for 25 minutes. Allow a natural pressure release for 10 minutes, then quick release any remaining pressure.
Open the lid and stir in the halved green olives. Let the stew sit on warm for 2 minutes so the olives warm through.
Ladle into bowls and top with the chopped fresh parsley before serving.