Updates with closing prices and analyst comments

By Md Manzer Hussain

BENGALURU, June 18 (Reuters) - Stock markets in the United Arab Emirates climbed on Thursday, led by sharp gains in Dubai, as optimism over an interim ceasefire agreement between the United States and Iran boosted risk appetite, although expectations of a more hawkish Federal Reserve capped broader gains across the Gulf.

U.S. President Donald Trump and his Iranian counterpart signed an accord on Wednesday aimed at ending the war, with Trump warning that Washington would resume attacks and target Iranian officials if Tehran failed to honour its commitments.

"While the process remains on track, investors could remain cautious as the two countries move to the next steps in negotiations," said Milad Azar, market analyst at XTB MENA.

"In the meantime, the reopening of the Strait of Hormuz could help ease concerns and improve operating conditions for several sectors, and the region could see a gradual increase in energy exports and trade flows, helping boost local economies," he added.

Meanwhile, investors priced in the likelihood of further Federal Reserve rate hikes after Warsh underscored the need to curb inflation and other policymakers signalled higher borrowing costs ahead.

Gulf markets tend to track shifts in U.S. monetary policy expectations as most regional currencies are pegged to the dollar.

Dubai's main index .DFMGI climbed 2.5% to 6,270, its highest level since the U.S.-Israeli war on Iran began in late February. Blue-chip developer Emaar Properties EMAR.DU gained 2.4%, while Emirates NBD Bank ENBD.DU surged 7.2%.

ENBD, Dubai's largest lender, said it had completed the acquisition of a majority stake in India's RBL Bank RATB.NS through a primary infusion of about $2.75 billion.

Abu Dhabi's benchmark index .FTFADG advanced 1.2%, with real estate and healthcare stocks leading the rally. First Abu Dhabi Bank FAB.AD , the UAE's largest lender, rose 3.5%, while real estate developer Aldar Properties ALDAR.AD jumped 6% to a more than three-month high of 9 dirhams per share.

Saudi Arabia's benchmark stock index .TASI inched up 0.1%, helped by gains in real estate, materials and healthcare stocks. Saudi Arabian Mining Co 1211.SE , also known as Ma'aden, rose 3.1%, while Saudi National Bank 1180.SE , the kingdom's largest lender by assets, added 1.5%.

Saudi Aramco 2222.SE fell 0.3%, paring earlier losses, after Chairman Yasir Al-Rumayyan said the oil giant was considering expanding its storage capacity around the world after energy supplies through the Strait of Hormuz were disrupted by the Iran war.

The Qatari benchmark index .QSI eased 0.6%, with most stocks trading lower. Industries Qatar IQCD.QA slipped 1.5%, while Qatar National Bank QNBK.QA, the region's largest lender, shed 0.4%.

SAUDI ARABIA	.TASI up 0.1% to 11,121
DUBAI	.DFMGI climbed 2.5% to 6,270
ABU DHABI	.FTFADGI rose 1.2% to 10,113
QATAR	.QSI down 0.6% to 10,511
KUWAIT	.BKP lost 0.6% to 9,221
BAHRAIN	.BAX up 0.6% to 2,028
OMAN	.MSX30 down 0.7% to 7,582
EGYPT	.EGX30 Closed

($1 = 3.7532 riyals)