Saudi Arabian Fertilizers Co <2020.SE> (Safco) was the main driver in the Saudi index, rising 2.9 percent after saying it would pay a dividend of 7 riyals ($1.87) per share.

Saudi Basic Industries Corp <2010.SE> (SABIC), which will pocket $200.3 million as dividends from Safco, however fell 0.3 percent in late selling.

"There is no reason to think Saudi markets may correct unless there is some big negative news coming," said Youssef Kassantini, an independent analyst.

The Saudi index <.TASI>, on its longest rally for more than one year, gained 0.1 percent. It had touched a 17-week high on Saturday.

Kuwait's index <.KWSE> gained for a second consecutive day after Credit Suisse upgraded the Gulf state's stocks.

Zain <ZAIN.KW> rose 1.6 percent on reports that the telecoms firm and India's Bharti Airtel <BRTI.BO> are expected to sign a letter of intent for a $9 billion African assets deal this week.

Qatar's index traded up, helped by a surge in Barwa Real Estate <BRES.QA> shares which rallied 3.2 percent. Barwa has climbed after saying last week it was in talks to sell Barwa Financial district to Qatar Petroleum.

"We believe Qatar stocks are quality stocks and are trading at a PE of 12, which is cheap compared to most of the region, but the Gulf isn't a great story at the moment and so Qatar is likely to remain range-bound," says Keith Edwards, head of asset management at Doha-based The First Investor.

Oman's index <.MSI>, which hit a 15-month high on Thursday on foreign buying, edged up 0.04 percent, backed by a 2.4 percent rally in Raysut Cement <RAYC.OM> which announced its dividend.

"Healthy dividend announcements have strengthened investor sentiments in the market," Ajeev Gopinath, assistant vice president, asset management at Gulf Baader Capital Markets said.

However, UAE markets slipped as investors remained on the sidelines awaiting more clarity on Dubai's debt issues.

Dubai's index <.DFMGI> dropped 0.1 percent after gaining earlier in the day while Abu Dhabi's index <.ADI> fell 0.4 percent, weighed down by Emirates Telecommunications Corp (Etisalat) <ETEL.AD> which fell 1.3 percent.

"There are lots of question marks that remain (about Dubai's debt)," said Chamel Fahmy, regional sales trader at Beltone Financial.

Volumes remained light in Abu Dhabi and hit a low since November in Dubai.

The Saudi index <.TASI> added 0.1 percent to 6,479 points.

The Kuwait index <.KWSE> rose 0.3 percent to 7,419 points.

The Dubai index <.DFMGI> fell 0.1 percent to 1,624 points.

The Abu Dhabi benchmark <.ADI> dropped 0.4 percent to 2,755 points.

The Egypt index <.EGX30> fell 2.2 percent to 6,708 points.

The Oman index <.MSI> inched up 0.04 percent to 6,798 points.

The Qatar measure <.QSI> rose 0.5 percent to 6,950 points.

The Bahrain index <.BAX> rose 0.5 percent to 1,513 points.-Reuters