Adds closing prices, analyst comment

By Ateeq Shariff

May 12 (Reuters) - Most major stock markets in the Gulf fell on Tuesday on fading hopes for a deal to end the U.S.-Israeli war on Iran, amid sharp differences between Tehran and Washington over a peace proposal.

U.S. President Donald Trump said on Monday that a ceasefire with Iran was "on life support," citing disagreements over several demands, including a halt to hostilities on all fronts, the lifting of a U.S. naval blockade, the resumption of Iranian oil exports and compensation for war damage.

Tehran also stressed its sovereignty over the Strait of Hormuz, a key shipping route through which about a fifth of global oil and liquefied natural gas supplies pass.

Saudi Arabia's benchmark index .TASI declined 1.1%, dragged by a 1.6% fall in Al Rajhi Bank 1120.SE and an 8.9% plunge in ACWA Power 2082.SE.

However, oil major Saudi Aramco 2222.SE gained 0.6%.

Brent crude futures LCOc1 gained $3.44, or 3.3%, to $107.65 a barrel by 1315 GMT.

GCC stock markets remained under pressure after the U.S. president rejected Iran's latest proposal, fueling concerns over renewed regional tensions. Any escalation could weigh on investor sentiment and dampen hopes for a swift resolution, said Milad Azar, market analyst at XTB MENA.

"Prolonged constraints in the Strait of Hormuz could continue to disrupt logistics and push oil prices higher."

Dubai's main share index .DFMGI dropped 0.6%, with top lender Emirates NBD ENBD.DU losing 2.7% and blue-chip developer Emaar Properties EMAR.DU down 2.1%.

In Abu Dhabi, the index .FTFADGI retreated 0.9%, hit by a 3% slide in ADNOC Gas ADNOCGAS.AD following a drop in first-quarter profit.

The United Arab Emirates carried out military strikes on Iran, including an April attack on a refinery on Lavan Island, the Wall Street Journal reported on Monday, citing people familiar with the matter.

The UAE has not publicly acknowledged the strikes, and Reuters could not immediately verify the report.

The Qatari index .QSI closed 1% lower, as most of its constituents were in negative territory.

Outside the Gulf, Egypt's blue-chip index .EGX30 finished 0.8% lower.

Saudi Arabia	.TASI fell 1.1% to 11,039
Abu Dhabi	.FTFADGI lost 0.9% to 9,699
Dubai	.DFMGI dropped 0.6% to 5,783
Qatar	.QSI declined 1% to 10,524
Egypt	.EGX30 down 0.78% to 54,059
Bahrain	.BAX added 0.2% to 1,933
Oman	.MSX30 eased 0.3% to 8,285
Kuwait	.BKP down 0.6% to 9,273