BEIJING, May 7 (Reuters) - Oil prices ticked up early on

Tuesday after Israel struck Rafah in Gaza while negotiations for

a ceasefire with Hamas continued without resolution.

Brent crude futures were up 46 cents, or 0.55%, at

$83.79 per barrel at 0010 GMT, while U.S. West Texas

Intermediate (WTI) crude futures rose 46 cents, or 0.59%,

to $78.94 a barrel.

Prices had edged upward on Monday, partially reversing the

declines of last week in which both contracts posted their

steepest weekly loss in three months, with the focus on weak

U.S. jobs data and the possible timing of a Federal Reserve

interest rate cut.

Palestinian militant group Hamas on Monday agreed to a Gaza

ceasefire proposal from mediators, but Israel said the terms did

not meet its demands and pressed ahead with strikes in Rafah

while planning to continue negotiations on a deal.

Israeli forces struck Rafah on Gaza's southern edge from the

air and ground and ordered residents to leave parts of the city,

which has been a refuge for more than a million displaced

Palestinians.

A lack of settlement between the parties in the now

seven-month long conflict has supported prices, as investors

worry that regional escalation of the war will disrupt Middle

Eastern crude supplies.

Riyadh's move to raise the official selling prices for its

crude sold to Asia, Northwest Europe and the Mediterranean in

June also supported prices, signalling expectations of strong

demand this summer.

The world's top exporter hiked its flagship Arab Light crude

oil price to Asia to $2.90 a barrel above the Oman/Dubai average

in June, the highest since January and at the upper end of

traders' expectations in a Reuters survey.