SHANGHAI, May 7 (Reuters) - China and Hong Kong stocks rose on Thursday, as risk sentiment improved on hopes of a Middle East de-escalation.

** China's blue-chip CSI300 Index .CSI300 edged up 0.2% by the lunch break, while the Shanghai Composite Index .SSEC gained 0.3%. Hong Kong benchmark Hang Seng .HSI was up 1.6%.

** The mood brightened after Iran said on Wednesday it was reviewing a U.S. peace proposal that sources said would formally end the war but leave unresolved key U.S. demands that Iran suspend its nuclear program and reopen the Strait of Hormuz.

** "Despite the lack of a definitive resolution, defensive positioning has lowered the threshold for positive surprises to influence price action," UBS strategist Rohit Arora said.

** Onshore energy shares .CSIEN fell 3.9%, the Coal Index .CSI000820 dropped nearly 4.5%.

** The 5G Communication Index .CSI931079 led gains onshore, up 3.5%.

** Hong Kong-listed tech majors .HSTECH were up 3.1%, following an overnight rally in their counterparts listed in New York. Alibaba shares 9988.HK jumped 4.3%.

** China's tourism sector saw a rise in trips during the May Day holiday, though official data released the day after the five-day break did not include spending figures that usually provide a fuller picture of consumption over the period.

** Chinese liquor shares .CSI399997 were up 1.1%, while food and beverage stocks edged up 0.4%.

** Markets are watching closely for U.S.-China developments as U.S. President Donald Trump is set to meet Chinese President Xi Jinping in May on his first visit to China in eight years.