By Purvi Agarwal

Feb 5 (Reuters) - Most Latin American stocks and currencies fell on Wednesday, retreating after gaining ground in the previous session, as investors assessed U.S. President Donald Trump's policies that have created an uncertain outlook for emerging markets this year.

MSCI's index tracking Latin American currencies .MILA00000CUS fell 0.7%, set to snap its six-session winning streak. The stocks gauge .MILA00000PUS was down 0.3%.

Meanwhile, Israel's shekel IRS= rose 0.5% against the dollar while the TA-125 index .TA125 jumped 1.6%, set for its best day in more than two months.

Trump said the U.S. would take over war-ravaged Gaza and create a "Riviera of the Middle East" after resettling Palestinians elsewhere, drawing regional condemnation.

Brazilian President Luiz Inacio Lula da Silva rejected the Gaza proposal, dismissing Trump's expansionist ambitions and tariff threats against trading partners.

"The latest tariff scare has a lot of economies wondering if they will need to be more stimulus-driven in order to counter the negative effects that could emanate from a 'trade-war'," said Juan Perez, director of trading at Monex.

"The Gaza news certainly adds to market nervousness."

Steep losses in oil prices also weighed on the currencies of Latin America's oil producers. O/R

The Brazilian real BRL= lost 0.5%, set to break its longest winning streak against the dollar in 20 years, if losses hold through the day.

Data showed industrial production in Brazil expanded in 2024, but a third consecutive monthly drop in December reinforced signs of an economic slowdown, helping the central bank's stance that cooling economic activity was crucial for bringing inflation to target.

Trump's tariff policies have caused havoc for emerging market economies as their assets become more volatile and less appealing against safe haven U.S. assets.

Latin American markets had rebounded on Tuesday as investors took advantage of the relief brought by Trump pausing tariffs on U.S. neighbors for a month, but the ongoing U.S.-China trade war kept concerns firmly on the table.

On the day, the Mexican peso MXN= fell 0.7%, while Colombia's peso COL= was down 0.3%. The only outlier was the Chilean peso CLP= that strengthened 0.4% against the dollar.

A rally in regional stock markets also lost some steam with Argentina's Merval .MERV down 0.9%.

Colombia's COLCAP .COLCAP lost 0.3% weighed down by Ecopetrol ECO.CN that shed 2.2% after the country's President Gustavo Petro called for the energy conglomerate to sell its U.S. fracking business.

The rouble touched its strongest level in four months against China's yuan, and was set for its best day since December versus the dollar.

Ukraine's GDP-linked warrants rallied nearly 2 cents after Ukraine and Russia said they were in touch with U.S. President Donald Trump's administration.

Elsewhere, the Polish central bank kept its rates unchanged at its meeting earlier in the day.

Highlights:

** India to review tariff surcharges on luxury cars, solar cells, may spur US imports

** Hungary's shaky economy disrupts Orban's re-election playbook

** Ecuador presidential candidate Gonzalez wants to raise social spending, tackle crime

Key Latin American stock indexes and currencies:

(Reporting by Purvi Agarwal in Bengaluru. Editing by Jane Merriman)

((Purvi.Agarwal@thomsonreuters.com;))