* Euro zone bond yields rise 8-12 bps across board

* Trump says he thinks Iran MOU is 'over'

* Oil prices jump 6%, pushing up bets on ECB rate hikes

(Updates throughout after Trump comments)

LONDON, July 8 (Reuters) - Euro zone bond yields rose

sharply on Wednesday to their highest levels in a month after

U.S. President Donald Trump said he thought the memorandum of

understanding with Iran was over, causing oil prices to jump.

Germany's 10-year bond yield rose 8 basis points

to 3.068%, its highest since June 11, as traders added to their

bets on further European Central Bank rate hikes this year.

Yields move inversely to prices.

Asked before a NATO summit in Turkey whether the MOU to end

the war reached last month was over, Trump said: "It's a very

interesting question. To me, I think it's over. I don't want to

deal with them."

The comments came after Iran's Revolutionary Guards said

they targeted U.S. military sites in Bahrain and Kuwait on

Wednesday after the U.S. launched a wave of strikes on Iran in

response to attacks on tankers in the Strait of Hormuz. The U.S.

also revoked a licence allowing Iran to sell oil.

Energy prices jumped, with international benchmark Brent

crude up 6% to $78.40 a barrel, the highest in two

weeks.

Oil prices have fallen sharply - from as high as $126 a

barrel in late April - since the U.S. and Iran reached a deal to

end their war in mid-June, which started further talks on a

range of issues, such as sanctions, and allowed energy to start

flowing through the key Strait of Hormuz.

Traders added to their bets on ECB rate hikes on Wednesday,

with money markets last pointing to 36 bps of further monetary

tightening by the end of the year, up from 25 bps on Tuesday.

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

to ECB rate expectations, rose 9 bps on Wednesday to 2.676%,

also its highest since June 11.

"It's a big wake-up call for the markets because the

expectation was that following the MOU, we were likely to start

to see the flow of oil coming back into the markets," said

Aneeka Gupta, a director of macroeconomic research at

WisdomTree.

"What has changed materially is the (Iranian) oil waiver is

gone," she said. "It's removed a very key incentive for Iranian

compliance."

Gupta added that the so-called TACO - Trump always chickens

out - was still at play and that the U.S. president could still

reverse his view on the MOU, especially as he is likely to want

U.S. fuel prices lower ahead of the midterm elections in

November.

Italy and France's 10-year bond yields were both up 12 bps

on Wednesday after Trump's comments .