* Equities, currency, Treasury investors in wait-and-see

mode

* Trump vows to attack civilian infrastructure unless

Iran opens Strait of Hormuz

* Investors see hopes for progress in comments from

US/Iran mediator, Pakistan

* Brent edges down near $109/ barrel, US crude climbs to

near $113/ barrel

(Updates prices after U.S. stock market close)

By Sinéad Carew and Lawrence White

NEW YORK/ LONDON, April 7 (Reuters) - Wall Street's main

equity indexes managed tiny gains on Tuesday while the dollar

lost ground and U.S. Treasuries fell as investors braced for the

outcome of a standoff between the U.S. and Iran.

U.S. President Donald Trumpissued Iran an ultimatum, threatening

to destroy every bridge and power plant in the country if Iran

does not reopen the Strait of Hormuz by the end of Tuesday. Iran

had said that it would retaliate against U.S. allies in the

Gulf, whose desert cities would be uninhabitable without power

or water.

Trading was cautious during the day, but stocks regained some

steam during the Wall Street session's last hour as investors

took some hope from Pakistan's Prime Minister Shehbaz Sharif's

announcement on X that Middle East diplomatic efforts were

progressing.

Pakistan, which has been mediating between the warring

countries, urged Trump to extend his deadline for two weeks and

Iran to open the Strait for the same timeframe.

A senior Iranian official told Reuters that Tehran was

positively reviewing Pakistan's proposal. The White House said

Trump was aware of Pakistan's proposal and that a response would

come.

After a choppy session for oil, which has been beset by supply

worries, U.S. crude futures settled slightly higher near $113

per barrel, while Brent finished down slightly.

HEADING FOR THE SIDELINES

Investors have been laser-focused on the U.S.-Israeli war with

Iran, which is now in its sixth week, as wild volatility in oil

prices increased concerns about inflation and a potential global

economic slowdown. Wall Street indexes fell modestly on Tuesday,

having made little progress in recent days, as hopes for a quick

resolution to the war were replaced by nervous uncertainty ahead

of Trump's deadline.

"It's leading most investors to head to the sidelines because

why sell everything if this is headed for resolution and why buy

something if you could be seeing a very significant decline in a

matter of days?" said Rick Meckler, a partner at Cherry Lane

Investments in New Vernon, New Jersey.

Meckler said if Trump carried out his threat it would usher

in a very bearish period for markets.

"There's no clear play here unless as an investor you've

decided you're relatively certain where this is headed," he

added.

On Wall Street, the Dow Jones Industrial Average fell

85.42 points, or 0.18%, to 46,584.46, while the S&P 500

rose 5.02 points, or 0.08%, to 6,616.85 and the Nasdaq Composite

rose 21.51 points, or 0.10%, to 22,017.85. During the

day, the benchmark S&P 500 had fallen more than 1%.

MSCI's gauge of stocks across the globe

rose 0.43 points, or 0.04%, to 998.09.

Earlier, the pan-European STOXX 600 index finished

down 1.01%, while Europe's broad FTSEurofirst 300 index

fell 24.68 points, or 1.04%.

CBOE's volatility index, sometimes referred to as

Wall Street's fear gauge, closed up 1.6 points at 25.78, paring

earlier gains from a session high of 28.

Iran has effectively closed the Strait of Hormuz, a global

transit chokepoint through which roughly a fifth of oil and gas

is shipped, since the start of the war on February 28. Tehran

has pushed back against U.S. pressure to reopen the strait,

saying it wants a lasting end to the war instead of a temporary

ceasefire.

TheU.S. Energy Information Administration said on Tuesday

fuel prices could keep rising for months even after the strait

reopens, in contrast with Trump's assurances that consumers will

see immediate relief when the war ends.

Oil prices were mixed, with U.S. crude settling up

0.48%, or 54 cents, at $112.95 a barrel after earlier touching

$117.73. Brent settled at $109.27 per barrel, down

0.46%, or 50 cents, on the day.

CONFLICT TRIGGERS ECONOMIC FEARS

Inflation concerns have upended the global rates outlook,

with traders no longer pricing in any rate cuts from the U.S.

Federal Reserve this year.

Chicago Federal Reserve Bank President Austan Goolsbee said he

is worried that the war will drive inflation higher even as it

slows the U.S. economy, putting the Fed in an uncomfortable

position where there is no obvious "cookbook" for what to do.

U.S. Treasury yields were little changed as investors were

wary of making big bets.

"I don't think anybody really wanted to buy Treasuries with the

chance that oil could go to $150 (a barrel), and that's the

scary part of this whole thing. They should be buying Treasuries

as a safe-haven bid, but for the most part, it's very tough to

do with the chance that oil could accelerate," said Tom di

Galoma, managing director of global rates trading at Mischler

Financial Group.

The yield on benchmark U.S. 10-year notes fell

3 basis points to 4.305%, from 4.335% late on Monday, while the

30-year bond yield fell 0.6 basis points to 4.8836%.

The 2-year note yield, which typically moves in

step with interest rate expectations for the Federal Reserve,

fell 4.8 basis points to 3.802%.

In currencies, the U.S. dollar lost ground after trading close

to its highest levels in almost 11 months for much of the day.

The dollar index, which measures the greenback

against a basket of currencies including the yen and the euro,

was last down 0.35% at 99.65.

The euro was up 0.49% at $1.1598, while against the

Japanese yen, the dollar weakened 0.05% to 159.6.

In precious metals, spot gold rose 1.43% to $4,713.86

an ounce while spot silver rose 0.34% to $73.04 an ounce.