Qatari stocks closed higher on Sunday, buoyed by hopes of resolution to a dispute with some of the country's Arab neighbours, while the Dubai index outperformed the region after its three-session break for a national holiday.

Saudi Arabia, the United Arab Emirates, Bahrain and Egypt have imposed a diplomatic, trade and travel embargo on Qatar since mid-2017, accusing Doha of supporting terrorism. Qatar denies the charges and says the embargo aims to undermine its sovereignty.

However, the Saudi foreign minister on Friday said that resolution with Qatar seemed "within reach" after Kuwait announced progress towards ending a row that Washington says hampers a united Gulf front against Iran. 

The Qatari blue-chip index gained 1.5% on Sunday. Most stocks traded higher, including a 2.3% rise for petrochemicals company Industries Qatar.

Dubai's main index advanced 2.6%, boosted by an 8.2% jump in Emaar Properties.

In Abu Dhabi, the index finished 1.4% up, with the United Arab Emirates' largest lender First Abu Dhabi Bank  rising 2.2%.

Saudi Arabia's benchmark index, however, retreated 1.1%, extending losses for a fourth session, dragged down by a 4.6% fall for Sulaiman Al-Habib Medical Services .

Outside the Gulf, Egypt's blue-chip index closed 0.1% higher, supported by a 2.1% gain for Egypt Kuwait Holding and a 3.9% jump for Cairo for Investment and Real Estate Development.

(Reporting by Ateeq Shariff in Bengaluru Editing by David Goodman) ((AteeqUr.Shariff@thomsonreuters.com; +918061822788;))