* Brent futures set for weekly gains

* ECB expected to hike rates soon

* Tehran vows to keep Strait of Hormuz shut

(Adds analyst comment, details on rate outlook in paragraphs

5-7)

By Niket Nishant

LONDON, March 13 (Reuters) - Euro zone government bonds

were on track on Friday for their second consecutive weekly

decline, as lingering concerns over the inflationary impact of

the Middle East war pushed yields higher.

The surge in oil prices since the outbreak of the

U.S.-Israeli war with Iran could exacerbate inflation worries

and prompt the European Central Bank to raise interest rates,

analysts said. Money markets are pricing in a 62% chance of an

ECB rate hike by June, according to LSEG data.

"Policymakers were clinging on to any economic figures to

give them an excuse to cut rates, but that conversation has now

shifted," said Roy Kashi, CEO of investment advisory firm

Falconedge.

Germany's 10-year government bond yield inched

up 0.4 basis points on the day to 2.9471%, as prices fell. It

was on course for a weekly jump of 8.5 bps.

Italy's 10-year government bond yield climbed

3.1 bps to 3.7648%.

The safe haven appeal of government bonds has been called

into question during the current market volatility as investors

have largely looked past them due to inflation worries.

The conflict also shows little sign of easing, dashing

earlier hopes of a quick resolution. Iran's Supreme Leader

Mojtaba Khamenei said Tehran will keep the Strait of Hormuz shut

as leverage against the U.S. and Israel, defying threats from

President Donald Trump.

Brent crude futures headed for a weekly jump of

nearly 7% despite efforts to ease the energy supply shock.

Traders on Polymarket are pricing in a 22% chance of a

ceasefire by the end of the month, compared with 45% earlier

this week.