TOKYO, April 12 (Reuters) - Oil prices rose in early

trade on Friday on heightened tensions in the Middle East,

where Iran has promised to retaliate for a suspected Israeli air

strike on its embassy in Syria, which could risk disruptions to

supply from the oil producing region.

Brent crude futures climbed 34 cents, or 0.38%, to

$90.08 a barrel, while U.S. West Texas Intermediate crude

futures rose 44 cents, or 0.51%, to $85.45, at 0033 GMT.

The gains erased some losses from the previous session,

which was dominated by worries about stubborn U.S. inflation

that dampened hopes for an interest rate cut as early as June.

Suspected Israeli warplanes bombed Iran's embassy in

Damascus in an April 1 strike 1 for which Iran has vowed

revenge, ratcheting up tension in a region already strained by

the Gaza war.

Israel has not said it was responsible but Iran's supreme

leader, Ayatollah Ali Khamenei, said on Wednesday Israel "must

be punished and it shall be" for the attack.

The U.S. expects an attack by Iran against Israel but one

that would not be big enough to draw Washington into war,

according to a U.S. official. Iranian sources said that Tehran

has signalled a response aimed at avoiding major escalation.

Israel is keeping up its war in Gaza but is also preparing

for scenarios in other areas, Prime Minister Benjamin Netanyahu

said on Thursday.

"The geopolitical risks remain elevated," ANZ Research said

in a note, adding that oil prices have jumped almost 19% also

supported by improving economic conditions and supply cuts by

the Organization of the Petroleum Exporting Countries and

allies, together called OPEC+.

In Europe, where the labor market has begun to soften and

growth is stagnating, central bankers left the policy rate

unchanged on Thursday but signalled they remain on track to cut

rates as soon as June.

"The European Central Bank's decision to leave policy rates

unchanged ... was expected, but accompanying statements open the

door for near-term monetary easing," S&P Global Market

Intelligence said in a note.

However in the U.S., Federal Reserve officials signalled on

Thursday no rush to cut interest rates, as sticky U.S. inflation

remains a concern.