UPDATE 3-Brent steady above $112 on Iran; US jobs data eyed

* Panetta believes Israel may strike Iran -reports

* Asian shares, currencies hold ranges before jobs data

* Coming Up: U.S. Non-farm payrolls; 1330 GMT (Updates prices)

By Manash Goswami

SINGAPORE, Feb 3 (Reuters) - Brent crude held above $112 on Friday as reports that Israel could strike Iran in the spring heightened already simmering tensions in the region.

The market was held back by caution ahead of key U.S. jobs data, which with dragging talks on Greek debt saw Asian shares and the euro weaken.

Front-month Brent crude rose 11 cents to $112.18 a barrel by 0746 GMT, gaining for a fourth consecutive day. U.S. crude increased 8 cents to $96.44 a barrel, reversing five straight sessions of losses.

"The oil market is getting driven on a headline by headline basis coming out of the Middle East," Ben Le Brun, market analyst at OptionsXpress, said in a report.

"Otherwise across financial markets the focus is on today's employment numbers. Everybody is waiting to see if data out of the United States continues to improve."

The Washington Post reported that U.S. Defense Secretary Leon Panetta was concerned about the increased likelihood Israel would launch an attack as early as April. CNN said it confirmed the report, citing a senior Obama administration official, who declined to be identified.

Brent is poised to rise about 0.5 percent this week, after gaining about 1.5 percent last week. U.S. crude is set to fall 3 percent, the steepest since the week ended Dec. 18.

Limp demand and robust supplies in the United States have weighed on the U.S. benchmark, widening the contract's price difference with Brent. The European benchmark has drawn support from the prospect of lower supplies as the West tightens sanctions on OPEC member Iran.

Brent's premium to U.S. futures shot to above $16 a barrel on Thursday, as the European benchmark rose for a third straight day while the New York contract dropped more than 1 percent.

"Increasing flows of Canadian crude and shale oil are continuing to exert pressure on the WTI forward curve, extending the contango structure from June 2012 four weeks ago to February 2013," analysts at JPMorgan said in a report.

DEMAND OUTLOOK

Markets are also focused on U.S. employment data due later in the day.

Nonfarm payrolls rose 150,000 in January after increasing 200,000 in December, according to a Reuters survey. The unemployment rate is seen holding steady at a near three-year low of 8.5 percent.

While job growth has quickened, employment remains about 6.1 million below its pre-recession level. There are no jobs for three out of every four unemployed people and 23.7 million Americans are either out of work or underemployed.

"Financial markets are operating in a 'holding pattern' ahead of what is the economic equivalent of the Super Bowl, that being U.S. employment figures," Tim Waterer, senior FX dealer at CMC Markets, said in a report.

"A healthy U.S. jobs result would serve to justify the optimism displayed in financial markets thus far in 2012."

The employment numbers follow a more-than-expected slide in new claims for unemployment benefits in the United States last week, pointing to further healing of the battered jobs market.

Jobless claims have zig-zagged in the last few weeks, but the trend -- reinforced by the latest drop -- suggests employers have grown less eager to lay off workers, offering hope they could also step up hiring.

Oil investors also remain worried about Europe's debt crisis worsening and hurting the global economy. The euro zone's finance ministers aim to agree a second financing package for Greece on Monday, and help contain the two-year old crisis. (Editing by Himani Sarkar)