By Md Manzer Hussain

BENGALURU, May 21 (Reuters) - Gulf equities rose in early trade on Thursday, driven by expectations that the United States was nearing a deal with Iran to end the Middle East war, while firmer oil prices also buoyed sentiment.

Investors watched for signs of progress in U.S.-Iran talks after President Donald Trump said on Wednesday negotiations were in their final stages, but warned of further attacks if Tehran did not agree to a deal. He said Washington was prepared to wait a few days for the "right answer".

Dubai's benchmark stock index .DFMGI rose 1%, recovering from the previous session's losses, with Emaar Properties EMAR.DU gaining 1.3% and Dubai Investments DINV.DU climbing 2.5%.

Dubai Investments reaffirmed plans to list its Dubai Investment Park unit before year-end, while its pharmaceutical unit Globalpharma signed seven memorandums of understanding covering research, manufacturing and sustainability.

The Abu Dhabi benchmark index .FTFADGI edged up 0.2%, led by a 1% rise in Aldar Properties ALDAR.AD and a 0.6% gain in ADNOC Gas ADNOCGAS.AD.

ADNOC's chief said on Wednesday the UAE's new crude pipeline bypassing the Strait of Hormuz was about 50% complete, adding global oil flows could take at least four months after the Iran war ends to recover to 80% of pre-conflict levels.

The Qatari benchmark index .QSI rebounded 0.6%, with Qatar Islamic Bank QISB.QA up 1%. QatarEnergy-linked Industries Qatar IQCD.QA and Mesaieed Petrochemical MPHC.QA climbed 1% and 1.3%, respectively.

QatarEnergy said on Wednesday it had acquired interests in three offshore exploration blocks in Uruguay from a Shell subsidiary, marking its first entry into the country's upstream sector. Financial details were not disclosed.

Saudi Arabia's benchmark stock index .TASI slipped marginally, weighed by a 2.3% fall in utilities firm ACWA Power 2082.SE and a 0.5% decline in Saudi Aramco 2222.SE.

The oil major is expected to burn more imported fuel oil for power generation this summer after the loss of natural gas supply from oilfields shut due to the Iran war's impact on exports, analysts said.

Oil prices climbed more than 1%, with Brent crude trading at $106.29 a barrel by 0618 GMT, on Iran peace deal uncertainty and U.S. inventory drawdowns.