LONDON - Euro zone government bond yields rose on Friday as oil prices ticked higher after U.S.-Iran peace talks in Switzerland ​were abruptly called off ⁠and as European Central Bank policymakers talked tough on inflation.

Germany's 10-year bond yield, ‌the benchmark for the bloc, rose 3 basis points to 2.955%, having fallen to a more than ​two-month low of 2.915% on Wednesday. Yields move inversely to prices. 

Oil prices were up just under 1% ​after Switzerland said ​U.S. talks with Iranian negotiators on a pact to end the Middle East conflict would not take place on Friday.

Brent and U.S. crude prices have ⁠fallen sharply since the U.S. and Iran reached a tentative agreement to end their war at the weekend but doubts remain about the longevity of the deal, which faces opposition from some U.S. Republicans and many in Israel.

ECB policymaker Pierre Wunsch told Reuters that the ​central bank may raise ‌interest rates one ⁠more time as ⁠soon as next month if it sees more evidence of euro zone inflation spreading beyond energy, even ​with the interim peace deal in place.

Wunsch's comments followed remarks ‌by ECB chief economist Philip Lane that the euro ⁠zone's economy may now be able to withstand slightly higher interest rates without losing steam.

The comments added to the upward pressure on yields, with Germany's 2-year bond yield up 2 bps at 2.626%.

Short-dated yields, which are sensitive to ECB rate expectations, have fallen less than their longer-dated peers as traders continue to fully price in another rate hike this year, after last Thursday's 25-bp increase to 2.25%.

"Despite oil marking its lowest price since the beginning of March, money markets continue to firmly price in another ‌hike from the ECB to be delivered in September or October," ⁠said Benjamin Schroeder, senior rates strategist at ING.

"Uncertainty on the ​geopolitical front remains, and the ECB might be reluctant to change its direction having just delivered a rate hike," he said.

"Sticking to more hawkish communication also ensures that higher market rates will ​continue to ‌do their part in containing inflation."

Italy's 10-year yield rose 3 bps ⁠to 3.667%, up from a three-month low ​of 3.619% touched on Wednesday.

(Reporting by Harry Robertson; Editing by Emelia Sithole-Matarise)