LONDON, July 1 (Reuters) - Euro zone bond yields rose

slightly on Wednesday after Iran said it would not meet U.S.

delegates for talks in Qatar, casting doubt on the peace

process, and as traders awaited inflation data for the bloc.

Germany's 10-year bond yield, the benchmark for

the bloc, rose 2 basis points (bps) to 2.934%, around its

highest in a week.

Euro zone yields fell sharply in May and June as the U.S.

and Iran neared and then confirmed an agreement to end the war

and allow energy to flow through the key Strait of Hormuz.

Oil prices continued to trade at around their lowest level

since the war began, although they were very slightly higher on

Wednesday. Brent crude inched up to $73.05 a barrel,

well off highs of above $125 seen in late April.

Italy's 10-year bond yield rose 5 bps to 3.644%,

up from a more than three-month low of 3.556% touched on

Tuesday.

Bond traders were waiting for euro zone inflation data, due

out later in the morning, which is expected to show price growth

cooled to 3% in June from a 2-1/2-year high of 3.2% in May.

The European Central Bank's annual monetary policy

conference in Sintra, Portugal, was set to conclude on

Wednesday, with ECB President Christine Lagarde among those

scheduled to speak.

(Reporting by Harry Robertson; Editing by Muralikumar

Anantharaman)