Most stock markets in the Gulf ended higher on Tuesday, as investors took stock of a potential ceasefire between Israel and the Iran-backed Hezbollah.

A ceasefire deal looked imminent on Tuesday, Israeli and Lebanese officials said, clearing the way for an end to the conflict that has killed thousands of people since it was ignited by the Gaza war 14 months ago.

Signs of a diplomatic breakthrough have been accompanied by a military escalation. Israeli airstrikes on Tuesday demolished more of Beirut's Hezbollah-controlled southern suburbs, while the armed group has kept up rocket fire into Israel.

Dubai's main share index <.DFMGI> advanced 1.3%, extending gains from the previous session, led by a 2.9% rise in blue-chip developer Emaar Properties <EMAR.DU>.

In Abu Dhabi, the index <.FTFADGI> added 0.7%.

Oil prices - a catalyst for the Gulf's financial markets - recovered slightly from the previous session's 2.8% drop as investors mulled the implications of a potential ceasefire between Israel and Hezbollah.

Saudi Arabia's benchmark index <.TASI>, however, fell 0.4%, hit by a 1.2% fall in aluminium products manufacturer Al Taiseer Group <4143.SE>.

Outside the Gulf, Egypt's blue-chip index <.EGX30> edged 0.1% higher, with Commercial International Bank <COMI.CA> rising 0.9%.

SAUDI ARABIA

<.TASI> fell 0.4% to 11,736

ABU DHABI

<.FTFADGI> rose 0.7% to 9,294

DUBAI

<.DFMGI> leapt 1.3% to 4,829

QATAR

<.QSI> was flat at 10,408

EGYPT

<.EGX30> up 0.1% to 30,284

BAHRAIN

<.BAX> finished flat 2,022

OMAN

<.MSX30> gained 0.7% to 4,553

KUWAIT

<.BKP> added 0.2% to 7,786

(Reporting by Ateeq Shariff in Bengaluru; Editing by Shailesh Kuber)