(Updates prices, adds ECB and analyst comments)

LONDON, June 30 (Reuters) - Euro zone bond yields dipped on

Tuesday as oil prices hovered around four-month lows and

investors waited for news on possible talks between Iran and the

U.S. in Qatar this week as well as inflation data.

Germany's 10-year bond yield fell 1.5 basis

points to 2.89%, to trade just above its lowest in four months.

Yields move inversely to prices.

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

to European Central Bank rate expectations, fell 2 bps to

2.512%.

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 $72.90 on Tuesday. It has fallen to around 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 less than expected

in June, at a 2% rate.

Data for four Germany states showed inflation cooled in May,

nudging bond yields lower. Figures for the euro zone bloc are

due on Wednesday.

But at the ECB'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.