TOKYO, March 12 (Reuters) - Japan's Nikkei share average

dropped on Thursday as global oil prices resumed their climb,

while concerns grew that the U.S.-Israeli war with Iran could

drag on.

The Nikkei was down 1.3% at 54,323.47, as of 0025

GMT, and the broader Topix slipped 1.13% to 3,656.85.

"The market is betting that the war will be prolonged," said

Takamasa Ikeda, senior portfolio manager at GCI Asset

Management.

"The oil prices rose, and that prompted investors to sell

stocks."

Oil prices settled up nearly 5% overnight as fresh attacks

on ships in the Strait of Hormuz worsened supply disruption

fears, and analysts said the International Energy Agency's

proposal for a record release of oil reserves is inadequate to

ease those worries.

Japan, which is dependent on the Middle East for around 95%

of its oil supplies, said it would release about 80 million

barrels of oil from its strategic reserves, equivalent to 45

days of supply, to mitigate global disruptions.

Technology stocks fell, with Advantest ( ADTTF ) and SoftBank

Group losing 2.5% and 3.93%, respectively. Tokyo

Electron ( TOELF ) fell 1.53%.

All but one of the Tokyo Stock Exchange's 33 industry

sub-indexes dropped, with the real estate sector losing 2.96% to

become the worst performer. The mining sector rose

0.85%.

Bucking the broader market trend, shares of heavy machinery

maker Kawasaki Heavy Industries ( KWHIF ) rose 2.95%, emerging as

the Nikkei's top percentage gainer.