By Mohd Edrees

July 17 (Reuters) - Dubai's stock index declined on Friday, weighed down by financial and real estate shares, as escalating U.S.-Iran tensions rattled investor sentiments, while Abu Dhabi's index bucked the trend.

The U.S struck bridges and an airport and Tehran retaliated against U.S. bases across the Middle East. U.S. President Donald Trump has threatened to launch broad-based air strikes on Iran's infrastructure, and has also declined to rule out a ground assault on Iran's coast or islands.

U.S. officials have said attacks on southern Iran are designed in part to give Trump options.

Dubai's main index .DFMGI dropped 1.4% to a five-week low, dragged down by a 3.5% fall in blue-chip developer Emaar Properties EMAR.DU and a 2.7% decline in Emirates NBD Bank ENBD.DU.

Food delivery platform Talabat Holding TALABAT.DU slipped 0.8% after Uber said it intended to make a voluntary takeover offer for Talabat's parent, Delivery Hero DHER.DE.

Investor sentiment remained cautious due to the risks of escalation as ongoing tensions between the U.S. and Iran increase uncertainty, said Joseph Dahrieh, managing director at Tickmill.

"Disruptions in the Strait of Hormuz also weighed on sentiment, with reduced shipping traffic through the strategic waterway raising concerns about potential impacts on trade and several sectors."

Abu Dhabi's benchmark index .FTFADGI closed in the green after trading in negative territory for most of the session, supported by gains in banking and energy stocks.

Abu Dhabi Commercial Bank ADCB.AD, the UAE's third-largest lender, jumped 1.5%, while ADNOC Gas ADNOCGAS.AD gained 0.9%.

Sharjah-based Dana Gas DANA.AD slid 1.9% after it shut down the main production facilities at Iraq's Khor Mor gas field due to credible security threats and escalating regional tensions.

Dubai's index fell 3.8%, its biggest weekly decline in more than four months, while Abu Dhabi's index logged a 1.6% weekly loss, according to LSEG data.

Oil, a key catalyst for Gulf's financial market, was up 2% at $85.87 a barrel by 1149 GMT. O/R

ABU DHABI	<.FTFADGI up 0.003% to 9,782 points
DUBAI	.DFMGI down 1.4% to 5,814 points