* Qatar recovers almost a third of losses due to diplomatic crisis
* Valuations relatively low, some hope for mediation efforts
* Saudi's Atheeb rises after obtaining new frequencies
* Dubai's Emaar Properties halts surge on unit's IPO plan
* Drake & Scull continues rebound in heavy trade
By Andrew Torchia
DUBAI, June 8 (Reuters) - Qatar's stock market rebounded on Thursday from a steep slide caused by its diplomatic rift with neighbouring states, while a plunge in oil prices weighed on Saudi Arabia's bourse.
The Qatari stock index, which had lost 9.7 percent over three days since Saudi Arabia and the United Arab Emirates cut diplomatic and trade relations, bounced 3.0 percent.
The mood in Doha remained nervous; Standard & Poor's downgraded Qatar's credit rating on Wednesday night, and the economic damage to Qatar from the rift could become serious if foreign banks pull out funds.
Nevertheless, fund managers noted that many Qatari blue chips had fallen to relatively attractive valuations. Investors are also hoping that mediation efforts over the weekend will help bring a resolution for the dispute.
Some of the stocks most heavily beaten down early this week on fears that Qatar's foreign trade would suffer rebounded most strongly, with Gulf Warehousing shooting up 9.1 percent.
Qatari Investors Group jumped 10 percent after saying it had won two lawsuits filed against it by Sanad Al Doha Real Estate Investment Co and Ezdan Holding. The suits had sought to oust the group's board of directors, it said.
Saudi Arabia's index fell back 1.2 percent after the Brent oil price tumbled 4 percent overnight. Among major losers, travel firm Al Tayyar sank 3.9 percent.
Atheeb Telecommunications rose 3.9 percent after saying it had obtained new frequencies for its operations at a cost of 2.07 billion riyals ($552 million).
Dubai's index fell 0.2 percent as Emaar Properties , which had surged 8.6 percent on Wednesday after saying it planned an initial public offering of up to 30 percent of its United Arab Emirates real estate development business, slipped back 0.3 percent.
Ubhar Capital estimated Emaar shareholders would receive a dividend of 0.92 dirham per share as a result of the IPO, assuming the full IPO proceeds were paid out. That compares with a 2016 dividend from Emaar Properties of 0.15 dirham.
Builder Drake & Scull, which has been rebounding for a couple of weeks from a 15-month low, climbed 4.3 percent in its heaviest trade since mid-February.
In Abu Dhabi, the index rose 0.5 percent as Dana Gas continue to outperform, adding 3.9 percent. It leaped 10.9 percent on Wednesday after saying it had received $40 million from the Egyptian government towards its outstanding receivables.
* The index fell 1.2 percent to 6,865 points.
* The index fell 0.2 percent to 3,400 points.
* The index rose 0.5 percent to 4,477 points.
* The index rebounded 3.0 percent to 9,238 points.
* The index rose 0.4 percent to 13,684 points.
* The index dropped 0.5 percent to 6,783 points.
* The index climbed 0.2 percent to 1,323 points.
* The index fell 0.4 percent to 5,355 points. (Editing by Catherine Evans)