By Mohd Edrees

June 19 (Reuters) - Stock markets in the United Arab Emirates closed lower on Friday as investors turned cautious over fading prospects of a U.S.-Iran truce after talks were called off and Israel escalated attacks in Lebanon.

Switzerland said U.S. talks with Iranian negotiators on a pact to end the Middle East conflict would not take place on Friday, as Vice President JD Vance dropped his travel plans, adding to uncertainty over the prospects for a lasting truce.

Dubai's main market .DFMGI retreated 1.7%, snapping a four-session winning streak, dragged down by a 4.4% fall in top lender Emirates NBD Bank ENBD.DU, while toll operator Salik Company SALIK.DU slipped 2.3%.

However, healthcare and education investment firm Amanat Holdings AMANT.DU rose 0.8% after completing the acquisition of an additional 10.03% stake in Cambridge Health Group for 105 million dirhams ($28.59 million).

Abu Dhabi's benchmark index .FTFADGI settled 1% lower, with most stocks in the index in negative territory. Real estate giant Aldar Properties ALDAR.AD dipped 1.8%, while telecom services provider Emirates Telecom Group, known as E& Group, EAND.AD declined 2%.

Abu Dhabi's top two lenders, First Abu Dhabi Bank FAB.AD and Abu Dhabi Commercial Bank ADCB.AD, slumped 2.2% and 2.9% respectively.

Stock markets in the UAE retreated after successive sessions of gains. While overall sentiment remains positive and could help support stocks, caution could limit the upside potential ahead of new diplomatic progress, said Joseph Dahrieh, Managing Director at Tickmill.

Dubai index notched up 3.5%, its biggest weekly gain since the first ceasefire announced in early April, while Abu Dhbai recorded 2.2% weekly rise, according to LSEG data.

($1 = 3.6727 UAE dirham)