JOHANNESBURG, March 17 (Reuters) - The South African

rand was flat on Tuesday as market participants monitored the

intensifying conflict in the Middle East and awaited the U.S.

Federal Reserve's upcoming policy decision.

* At 1420 GMT the rand traded at 16.66 against the dollar

, little moved from its previous close.

* Israel's Defence Minister Israel Katz said on Tuesday

the Israeli military had killed Iran's security chief, while

Tehran kept up attacks against Gulf neighbours.

* International oil prices rose more than 2% for the

day.

* Analysts expect continued pressure on the rand after

it shed over 2% last week, extending losses of almost 4% the

week before, amid concerns that rising oil prices will lift

inflation in net energy-importer South Africa.

* The dollar was down 0.2% against a basket of

currencies as investors looked to the Federal Reserve's two-day

policy meeting that begins later on Tuesday.

* The Fed is widely expected to hold rates for a second

straight meeting when it announces its policy decision on

Wednesday.

* Like other risk-sensitive currencies, the rand often takes

cues from global drivers like U.S. policy, in addition to

domestic economic data.

* Domestically-focussed investors will also be on the

lookout for February inflation data and January

retail sales numbers on Wednesday.

* On the Johannesburg Stock Exchange, the Top-40 index

was last up 0.6%.

* South Africa's benchmark 2035 government bond

was also stronger, with the yield falling 11.5 basis points to

8.815%.