* U.S. CPI rises 0.3 percent, Treasuries trim losses
* Geopolitics still a big factor
* Investors reverse curve-flattening trades
NEW YORK, July 22 (Reuters) - U.S. long-term Treasury debt prices fell on Tuesday as safe-haven demand weakened in line with a rise in stocks, with investors hopeful tensions in the Middle East and Ukraine will ease.
Analysts also said there was a reversal of the previous session's yield curve-flattening trades. On Monday, the gap between short- and long-term interest rates, mainly the spread between yields of 2-year notes and 10-year bonds, shrank to their narrowest in more than a year. This was an indication that market participants were bracing for the Federal Reserve's interest rate hikes.
Those trades were unwound on Tuesday, with investors buying the front end of the curve and selling the long end.
Benign U.S. inflation data added to buying of short-term notes, analysts said, capping their yields, which move inversely with bond prices.
In the meantime, geopolitical concerns are still very much a factor in the U.S. Treasuries market, although on Tuesday, Treasury strategists said the situation was no worse than on previous days.
"Things have not worsened, so that's one of the reasons we have seen some sell-off. Equity markets globally were fairly robust, starting with Asia, Europe, and now Wall Street," said Tom di Galoma, head of fixed income rates and credit trading at ED&F Man in New York.
Israel pounded targets across the Gaza Strip on Tuesday, saying no ceasefire was near, while European Union foreign ministers threatened Russia with harsher sanctions over Ukraine. But the tougher talk may not be matched by much action after France's president signaled the disputed delivery of a warship to Moscow would go ahead.
In late morning trading, benchmark 10-year U.S. Treasuries were down 3/32 in price to yield 2.487 percent, while the 30-year Treasury bond was down 9/32 in price, pushing the yield up to 3.278 percent. On Monday U.S. 30-year Treasury bond yields fell to their lowest since June 2013.
Treasuries trimmed losses following data showing U.S. consumer inflation data rose 0.3 percent in June, for many a benign reading.
Investors also reversed some of Tuesday's flattening trades as valuations became attractive on the front end.
"There's some curve-jockeying going on," said ED&F Man's Di Galoma. "The curve had a very good move yesterday flatter and there was a tremendous amount of buying on the long end, but that has dried up and the front-end, meanwhile, has gotten too cheap."
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Dan Grebler)