DUBAI, July 13 (Reuters) - Gulf stocks advanced on Thursday, with Qatar leading the way as investors turned positive on financial earnings and also took heart from U.S. Federal Reserve Chair Janet Yellen's overnight comments hints of a more gradual monetary tightening.

Financial and property stocks were leading gainers across the region's stock markets, with the Qatari index at its highest since Saudi Arabia, Bahrain, the United Arab Emirates and Egypt cut diplomatic ties and severed transport links with Qatar in early June.

Qatar stocks were up 1.96 percent in early trade, led by Qatar National Bank's 4.9 percent gain and a 7.9 percent jump for Qatar Electricity and Water Co .

"Qatar National bank came out with a decent result and in its conference call it came out with a positive outlook, and that is affecting the market," said Chiro Ghosh, senior analyst at Securities & Investment Company (SICO).

He said investors are gearing up for Saudi earnings and are cheered by higher than expected dividend announcements from banks such Banque Saudi Fransi and Al Rajhi Banking & Investment .

Al Rajhi was up 2.6 percent in morning trade, outperforming a 0.55 percent gain for the Riyadh index . Consumer cyclicals were also buoyant.

In Dubai, property developers and financials pushed the index 1.1 percent higher, with Damac Properties up 4.7 percent.

Abu Dhabi's index gained 0.9 percent, with Union National Bank up 2.8 percent after its second-quarter net profit rose by almost 7 percent, beating analysts' forecasts.

(Reporting by Saeed Azhar; Editing by David Goodman) ((celine.aswad@thomsonreuters.com)(+9715 62247653)(Reuters Messaging: celine.aswad.thomsonreuters.com@reuters.net))