(Adds analyst comment and dateline, updates prices)

By Eric Onstad

LONDON, April 10 (Reuters) - Copper prices crept to

their highest in more than three weeks on Friday as investors

weighed signs of improved demand in top metals consumer China

against uncertainty over a fragile ceasefire in the Iran war.

Benchmark three-month copper on the London Metal

Exchange was up 0.5% at $12,742.50 a metric ton by 0930 GMT

after touching its highest since March 8 at $12,780. It was set

to end the week up more than 3%.

LME copper has gained 9% since March 23, when it sank to the

lowest in over three months, on hopes for ending the war in the

Middle East, which may damage the global economy and metals

demand.

"I don't think there's any appetite to try to go long where

there's risk of deterioration ahead of those negotiations in

Islamabad," said Ole Hansen, head of commodity strategy at Saxo

Bank in Copenhagen.

Investors were wary as a fragile two-week ceasefire between the

U.S. and Iran showed further strain on Friday, a day before they

are to negotiate in Pakistan.

The most-active copper contract on the Shanghai

Futures Exchange added 0.6% to close at 98,440 yuan ($14,409.72)

a ton, ending the week up 2.1%.

The market was supported by signs of improved demand in China,

where copper inventories in warehouses monitored by SHFE fell

11.5% this week, having slid 37% since March 9.

The Yangshan copper premium, which reflects demand for

copper imported into China, jumped to $73 a ton, data showed on

Friday, its strongest since June last year.

"Even though there's concern about Iran, the actual numbers

on the ground in China points in the other direction, so the

market is trying to navigate between those two elements," Hansen

said.

Key technical resistance on the upside is $12,800, based on

a retracement from February to March and the 50-day moving

average, he added.

Copper prices shrugged off a further increase in LME

inventories to their highest since December 2013.

LME aluminium rose 1% to $3,479 a ton as the

continued closure of the Strait of Hormuz highlighted supply

issues in the Gulf, which accounts for about 8% of global

production.

Among other metals, LME zinc dropped 0.7% to $3,305

a ton while nickel gained 0.7% to $17,205, tin

advanced 0.8% to $48,050 and lead was flat at $1,927.

($1 = 6.8315 Chinese yuan renminbi)