Tokyo - Oil prices rose in Asia on Tuesday against the backdrop of geopolitical tensions fuelled by a warning of tougher sanctions against Russia over the downing of a Malaysian airliner and fierce fighting in Gaza.

The US benchmark, West Texas Intermediate (WTI) for August delivery, was up 54 cents at $105.13 at midday, and Brent crude for September climbed 26 cents to $107.95.

Five days after Malaysia Airlines Flight MH17 crashed in Ukraine, pro-Russian separatists conceded to a furious international clamour and handed over the bodies of victims and the plane's black boxes, helping ease tensions and lifting Asian equities.

A train carrying the remains of 280 of the 298 people killed in the disaster was finally allowed to leave a rebel-held region in eastern Ukraine as the militants declared a truce on Tuesday around the crash site.

The devices, which record cockpit activity and flight data, were handed to Malaysian officials by the prime minister of the self-proclaimed Donetsk People's Republic, Alexander Borodai, in front of scores of journalists.

“The backdrop continues to be one of a cautious nature as geopolitical issues remain at the forefront,” Singapore's United Overseas Bank said in a note.

The US has accused Russia of supplying the weapons allegedly used to shoot down the passenger jet and European leaders readied new sanctions against Moscow, which has denied any involvement.

Russia is the world's second biggest oil producer and there are fears that tougher sanctions could affect those supplies. Ukraine is also a major conduit for Russian gas exports to Europe.

In the Middle East, Israel continued to pummel Gaza, raising the Palestinian death toll to more than 570, as Egypt took centre stage in world efforts to broker a ceasefire.

UN chief Ban Ki-moon and US Secretary of State John Kerry were in Cairo on Tuesday in a bid to broker a truce between Israel and Hamas militants in Gaza. - AFP