LONDON, June 30 (Reuters) - Euro zone bond yields moved up

from early declines on Tuesday as oil prices hovered around

four-month lows and investors waited for developments on

possible talks between Iran and the United States in Qatar this

week. European inflation data was also a concern.

Germany's 10-year bond yield rose 5 basis points

to 2.91%, its highest in a week, after earlier falling to

2.876%. Yields move inversely to prices.

Germany's 2-year bond yield, which is sensitive

to European Central Bank rate expectations, slipped 0.8 basis

point to 2.535%.

The U.S.-Iran peace deal has come under threat as both sides

traded attacks, but the White House said it is sending envoys to

Doha this week for further talks on the agreement.

Brent crude oil, the global benchmark, was slightly

lower at $73.03 a barrel on Tuesday. It has fallen to near its

lowest levels since the war started in late February as oil has

begun to flow again through the Strait of Hormuz.

Bond traders were also watching euro zone June inflation data,

with figures from France showing prices rose in the month by 2%,

less than expected.

Data in Germany showed inflation cooled in May, nudging bond

yields lower. Figures for the euro zone bloc are due on

Wednesday.

But at the European Central Bank's annual conference in Sintra,

Portugal, policymakers said the oil price shock would continue

to affect the economy, and they remained concerned about

inflation.

"Keeping a somewhat hawkish bias makes sense," said Michiel

Tukker, rates strategist at ING.

"Only later this year will we have a better understanding of

the second-round inflation impact and more certainty about the

trajectory of oil."

Money markets are pricing in one more 25 bp rate hike from the

ECB this year, after it raised rates earlier this month.