Updates with afternoon levels

By Avinash P and Ragini Mathur

June 4 (Reuters) - Latin American stocks slipped on Thursday, while most regional currencies edged higher against the U.S. dollar, as investors weighed whether the latest developments in the Middle East could lead to a lasting peace deal.

Israel and Lebanon agreed on Wednesday to implement a ceasefire, but hopes for a broader de-escalation were tempered after Hezbollah rejected the accord and Israel said it would not withdraw troops from Lebanon.

The developments complicated U.S. President Donald Trump's efforts to broker a wider peace agreement with Iran.

Investors were looking for clearer signs of a breakthrough after several failed rounds of talks to end the months-long conflict in the Middle East.

Regional stocks have largely tracked global markets in recent weeks, swinging as the United States and Iran have veered between diplomacy and military strikes.

Broader MSCI indexes tracking Latin American stocks .MILA00000PUS and currencies .MILA00000CUS fell 0.4% and 0.2%, respectively.

"The lack of a clear U.S.-Iran deal and uncertainty around energy flows through the Strait of Hormuz are keeping investors worried," said Juan Pérez, director of trading at Monex.

"Headlines are changing quickly — positive news in the morning can be reversed by the afternoon — making it hard for markets to form a stable view."

Mexico's peso MXN= strengthened 0.2% against the dollar, while local equities .MXX fell 1.2%.

Former Mexican President Andrés Manuel López Obrador accused Washington of employing "interventionist and unscrupulous practices" to bolster Mexico's right-wing opposition and weaken his leftist political movement.

The comments come as the United States and Mexico are renegotiating the USMCA, the North American trade pact, while Washington is proposing new tariffs on several countries, including Latin American nations.

Colombia's equities .COLCAP were flat and the currency COP= edged 0.2% higher. Stocks had rallied earlier in the week after right-wing candidate Abelardo de la Espriella was confirmed to face leftist Ivan Cepeda in the presidential runoff.

Politics was also in focus in Peru, where left-wing candidate Roberto Sanchez is set to face right-wing Keiko Fujimori later this week.

Sanchez has recently adopted a more pragmatic tone after his earlier plans to overhaul the mining sector, along with his association with jailed former President Pedro Castillo, unsettled investors.

Peruvian stocks .MXNUAMPESCPGPE fell 0.6%, while the sol PEN= was largely flat.

"Elections in countries such as Colombia, Brazil and Peru are being closely watched because political stability, or a shift toward more market-friendly policies, could support local currencies," Pérez said.

Brazil's stock exchange .BVSP was closed for a holiday on Thursday, while the real BRL= was little changed.

Key Latin American stock indexes and currencies:

Stock indexes	Latest	Daily % change
MSCI Emerging Markets .MSCIEF	1758.36	-1.65
MSCI LatAm .MILA00000PUS	2954.53	-0.35
Brazil Bovespa .BVSP	170330.63	-2.22
Mexico IPC .MXX	67448.76	-1.23
Chile IPSA .SPIPSA	10328.99	-0.3
Argentina MerVal .MERV	3196461.5	1.02
Colombia COLCAP .COLCAP	2239.83	0.04
Currencies	Latest	Daily % change
Brazil real BRL=	5.064	0.01
Mexico peso MXN=	17.2832	0.24
Chile peso CLP=	895.59	-0.08
Colombia peso COP=	3562.88	0.24
Peru sol PEN=	3.4033	0
Argentina peso (interbank) ARS=RASL	1,436.5	0.21
Argentina peso (parallel) ARSB=	1,415.0	1.05