Oil prices edge up _

LONDON, April 16 (Reuters): Oil prices rose on Thursday, reversing earlier declines as the market questioned whether peace talks between the US and Iran would achieve a deal to end the war that has disrupted energy supplies from the Middle East.

Brent crude futures climbed 67 cents, or 0.7 per cent, to $95.60 a barrel at 1205 GMT. US West Texas Intermediate crude futures were up 17 cents, or 0.2 per cent, to $91.46 a barrel.

"We remain sceptical of any immediate solving of this war," said PVM oil market analyst John Evans. "Pick any headline and there is always a counter."

The US-Israeli war on Iran has caused unprecedented disruption of global oil and gas. It has led to the halting of traffic through the Strait of Hormuz, which typically carries about 20 per cent of the world's oil and liquefied natural gas flows.

US and Iranian officials were considering returning to Pakistan for further talks as early as the coming weekend. Pakistan's army chief arrived in Tehran on Wednesday as a mediator.

A source briefed by Tehran told Reuters that Iran could consider allowing ships to sail freely through the Omani side of the Strait of Hormuz in the event of a deal to prevent renewed conflict after a two-week ceasefire started on April 8.

In another sign of a potential easing of military actions, Israel's cabinet met on Wednesday to discuss in neighbouring Lebanon, a senior Israeli official said, more than six weeks into its war with Iran-backed Hezbollah.