Markets have been rattled since the US-Israel war on Iran broke out at the end of February, with Tehran effectively closing the Strait of Hormuz, a key global oil transit chokepoint that has spurred inflation worries.

While investors have pinned their hopes on a resolution to the war, the talks so far have yielded no progress, with US President Donald Trump imposing a deadline of Tuesday 8 p.m. Eastern Time (0000 GMT Wednesday) for a deal to be reached.

That has left markets biding time with the US dollar holding onto its gains and oil prices rising.

Brent crude futures rose 0.4 percent to $110.19 a barrel while US West Texas Intermediate crude futures climbed 0.8 percent to $113.31.

A record-breaking quarterly profit forecast from chipmaker Samsung Electronics helped lift investor mood a bit but markets remained focused on the Iran war.

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MSCI's broadest index of Asia-Pacific shares outside Japan was 0.4 percent higher. Japan's Nikkei was choppy as it erased early gains to trade 0.2 percent lower.

US stock futures slipped 0.55 percent, while European futures pointed to a higher open after being closed for holidays on Friday and Monday.

"We are back on a Trump imposed countdown clock and there's no way to predict with any confidence what will happen," Kyle Rodda, senior markets analyst at Capital.com, said.

"The more intrepid traders might make a bet one way or the other. Others will look to hedge risk or stay out entirely. But there's not much market participants can really do but wait and see."

Iran said it wanted a lasting end to the war, instead of a temporary ceasefire and pushed back against pressure to reopen the waterway, a conduit for about a fifth of the world's oil and natural gas supply.

Trump warned Iran could be "taken out" if it did not meet his deadline for a deal, vowing to destroy Iranian power plants and bridges, brushing off concerns that such actions would be a war crime.

"Any follow‑through on threats to target Iran’s power infrastructure would mark a significant escalation, raising the risk of retaliatory action that could further disrupt Gulf energy facilities," said Vasu Menon, managing director of investment strategy at OCBC in Singapore.

The conflict has spurred worries about stagflation - high inflation with weak or slow growth - upending the global rates outlook, with traders no longer pricing in any rate cuts from the Federal Reserve this year.

Data on Monday showed US services sector growth slowed in March, while prices paid by businesses for inputs increased by the most in more than 13 years, an early indication that the prolonged war with Iran was boosting inflationary pressure.

US inflation data is due later this week but for now investor attention will be on Trump's war deadline and whether a deal is agreed.

In currencies, the euro was steady at $1.1538. The dollar index, which measures the US currency against six other units, was at 100.06, near its recent highs. The dollar has been the haven of choice among investors during the tumult.

The Japanese yen last bought 159.91 per US dollar in early trading, hovering near the crucial 160 level that traders have been watching out for to gauge whether Tokyo might intervene in the wake of strong recent comments from officials.

Gold prices eased 0.17 percent to $4,640 per ounce in early trading.

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