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US STOCKS-Fighting in Ukraine, Gaza sends Wall Street lower

* Yum Brands down on China food safety, McDonald's slips

* EMC jumps on report of activist investor stake

* Indexes down: Dow 0.44 pct, S&P 0.44 pct, Nasdaq 0.44 pct

(Updates prices, adds Allergan, Obama statement on Ukraine)

NEW YORK, July 21 (Reuters) - U.S. stocks fell on Monday, following the sharpest moves in indexes in the past three months during the two previous sessions, as developments in Ukraine and Gaza continue to garner investor focus.

Israeli jets, tanks and artillery pounded Gaza again as the death toll from a two-week conflict topped 500 amid growing international calls for a ceasefire. Fighters from Hamas, which controls Gaza, have repeatedly tried to infiltrate Israel over the past week through hidden tunnels.

Fighting flared in the Ukrainian city of Donetsk as investigators began to inspect the bodies of victims of a Malaysia Airlines jet shot down last week. The United States and its allies have pointed the finger at pro-Russian rebels and at Moscow itself over the downing of the plane with 298 people aboard. Russia has denied involvement and blamed the Ukrainian military.

The United States and the EU last week announced further economic sanctions against Russian interests before the jet was shot down, and sanctions could become even more stringent. However, the effect on the U.S. or the global economy continues to be seen as limited.

The situations in Gaza and Ukraine "are both quite serious, but at this point unlikely to derail the U.S. economy," said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

"Earnings have been good and there's the Fed's continued support. Investors are trying to balance out the support for the U.S. market with the risks the geopolitical tension brings."

U.S. President Barack Obama said Monday that Russia and President Vladimir Putin have direct responsibility to compel separatists to cooperate with an investigation into the plane crash.

The Dow Jones industrial average fell 75.91 points or 0.44 percent, to 17,024.27, the S&P 500 lost 8.75 points or 0.44 percent, to 1,969.47 and the Nasdaq Composite dropped 19.54 points or 0.44 percent, to 4,412.60.

The S&P had sold of Thursday after news the Malaysian jet was shot down, falling 1 percent for the first time since April 10. On Friday, the index then rose more than 1 percent for the first time since April 16.

On Thursday, the CBOE Volatility Index had jumped 32 percent before retreating 17 percent on Friday. On Monday, it rose 10 percent but at 13.3 remains well below its historical average of 20.

"When you have interest rates as low as they are it really dampens stock market volatility tremendously," Meckler said. "It takes very significant, serious international activity to change that volatility level."

EMC Corp rose 3.8 percent to $28 after Elliott Management Corp acquired a $1 billion stake. The activist investor plans to push the data storage equipment maker to spin off its majority-owned VMware Inc unit, the Wall Street Journal reported. VMWare shares fell 0.8 percent to $94.56.

McDonald's and Yum Brands fell 1 percent and 3.7 percent respectively as they face a new food safety scare in China, denting efforts to shore up reputations hurt by a 2012 safety scandal.

Allergan rose 1.3 percent to $169.56. It announced 1,500 jobs cuts included in a $475 million restructuring to boost profits over six years - part of a plan to fight off a hostile bid from Valeant Pharmaceuticals.

(Reporting by Rodrigo Campos; Editing by Jeffrey Benkoe and Nick Zieminski)