Most stock markets in the Gulf fell on Sunday amid worries that the escalating war between Palestinian group Hamas and Israel will spiral further.

The Israeli military said on Sunday it would continue to allow Gazans to evacuate south ahead of an expected ground assault by its forces on the Gaza Strip in retaliation for unprecedented attacks by Hamas militants eight days ago.

Saudi Arabia's benchmark index dropped 0.4%, dragged down by losses in the energy, finance and IT sectors, with oil major Saudi Aramco falling 1% and Elm Company sliding 1.1%.

The kingdom's largest lender Saudi National Bank also slipped 2.3%, and Saudi Arabian Mining Co lost 2.2%.

The Qatari index was up for a fourth straight session, edging 0.1% higher, aided by the industrial and energy sectors.

Industries Qatar rose 2.3% and Qatar Fuel gained 1%.

However, the region's largest lender Qatar National Bank and telecom services provider Ooredo Qatar declined 1% and 2% respectively.

Outside the Gulf, Egypt's blue-chip index was up 1.6%, lifted by gains in most sectors, with Misr Fertilizers Production Co shooting up 16.7% and Abu Qir Fertilizers and Chemical Industries climbing 6%.

SAUDI ARABIA dropped 0.4% to 10,543 QATAR added 0.1% to 10,126 EGYPT rose 1.6% to 20,325 BAHRAIN lost 0.1% to 1,943 OMAN fell 0.5% to 4,760 KUWAIT lost 0.8% to 7,181

(Reporting by Md Manzer Hussain; Editing by Jan Harvey)