* Diplomatic efforts to resolve conflict intensifies
* Arab League condemns Israeli attacks on Gaza
* Coming Up: U.S. existing home sales 1500 GMT
By Luke Pachymuthu
SINGAPORE, Nov 19 Brent crude edged up to above
$109 a barrel on Monday as escalating tensions between Israelis
and Palestinians fueled concerns about supply from the Middle
Investors fear that the Israeli-Palestinian conflict could
draw in Arab producers and possibly threaten supply flows from
the region, which supplies more than a third of the world's oil.
Brent crude for January delivery gained 65 cents to
$109.60 a barrel by 0223 GMT. U.S. oil also rose 65 cents
to $87.57, off a session peak of $87.68, its loftiest since Nov.
"If the situation starts to deteriorate further where we see
other oil producers getting involved and backing the rhetoric
with action, then you could see an extension on the risk
premium," said Ric Spooner, chief market analyst at CMC Markets
"The market will definitely be seeking a clearer assessment
of the current situation."
An Israeli missile killed at least 11 Palestinian civilians
including four children in Gaza on Sunday, the single deadliest
incident in five days of Palestinian rocket attacks on Israel
and Israeli air strikes on the Gaza Strip.
Pressure for a ceasefire is rising amid the violence. Egypt
has taken the lead in trying to broker a ceasefire and Israeli
media said a delegation from Israel had been to Cairo for talks
on ending the fighting, although a government spokesman declined
to comment on the matter.
The Israeli military said 544 rockets fired from Gaza have
hit Israel since Wednesday, killing civilians and wounding
dozens and has been giving signs of a possible ground invasion
Even as Middle East tensions remained on the boil, investors
were equally focused on the looming "fiscal cliff" in the United
States -- the more than $600 billion in tax increases and
spending cuts that threaten to push the U.S. economic recovery
into another recession if it kicks in at the start of next year.
Top lawmakers emerged from a meeting with President Barack
Obama on Friday confident of finding common ground on taxes and
spending which would allow them to avert the disastrous
"If we don't get any deal, and the automatic provisions kick
in, it will be a massive blow to economic confidence globally,"
"And any attempt to just kick this down the road for a later
date, is also going to have negative implications for the global
economy, not just the U.S."
(Editing by Manolo Serapio Jr. and Ed Davies)