Updates to closing prices, analyst comment

By Ateeq Shariff

June 1 (Reuters) - Most Gulf stock markets ended lower on Monday after Iran and the U.S. exchanged strikes, while Israel ordered troops to push further into Lebanon in its battle with Tehran-backed Hezbollah.

The U.S. said it struck Iranian military sites over the weekend, and Iran's Revolutionary Guards said on Monday they had targeted a U.S. base in response, marking the latest exchange amid negotiations to end the three-month-old war.

The fighting, which followed Israel-Lebanon peace talks hosted by Washington on Friday, dampened hopes that the U.S. and Iran could soon announce an extension of their ceasefire.

Saudi Arabia's benchmark index .TASI dropped 0.6%, hit by a 0.8% fall in Al Rajhi Bank 1120.SE and a 0.6% decrease in oil major Saudi Aramco 2222.SE.

The Qatari index .QSI retreated 1.1%, as most of its constituents were in negative territory, including Qatar Islamic Bank QISB.QA, which declined 2.8%.

Renewed uncertainty over the Iran war is weighing on sentiment. Daniel Takieddine, co-founder and CEO of Sky Links Capital Group, said markets are likely to remain cautious, with limited risk appetite until there is clearer progress toward a resolution and the Strait of Hormuz reopens.

In Abu Dhabi, the index .FTFADGI was down 0.5%, with the country's biggest lender First Abu Dhabi Bank FAB.AD falling 2.6%, as the lender has exposure to the insolvencies of properties linked to mortgage lender Market Financial Solutions, according to the Financial Times.

The lender did not immediately respond to a Reuters request for comment.

Dubai's main share index .DFMGI bucked the trend to close 0.3% higher, helped by a 2.8% rise in toll operator Salik SALIK.DU.

U.S. President Donald Trump said on Friday he would soon decide on a proposed deal to extend the ceasefire with Iran, though the two countries still appear to differ on significant issues that have been central to the conflict.

Oil prices rose more than 2% in early trading on Monday, stoking concerns around inflation and interest rate hikes. O/R

Outside the Gulf, Egypt's blue-chip index .EGX30 rose 0.4%.

Saudi Arabia	.TASI fell 0.6% to 11,010
Abu Dhabi	.FTFADGI down 0.5% to 9,651
Dubai	.DFMGI added 0.3% to 5,775
Qatar	.QSI dropped 1.1% to 10,439
Egypt	.EGX30 rose 0.4% to 52,854
Bahrain	.BAX finished flat at 1,980
Oman	.MSX30 was up 0.9% to 7,795
Kuwait	.BKP lost 0.8% to 9,231