European markets edged up again as they consolidated the gains of Monday's Christmas rally.

A firmer dollar offered early support, but an uncertain session on Wall Street robbed continental shares of early gains.

Investors were also looking to Frankfurt where the council of the European Central Bank was meeting to decide on two key interest rates.

Frankfurt

German shares closed firmer as dollar strength was countered by Wall Street's losses.

The Dax index ended trading off intra-day highs at 4,825 - up 44 points.

The insurance sector saw some gains, following last week's reshuffling of cross-shareholdings.

Paris

French stocks were little changed in late deals, coming off firmer levels in line with Wall Street's drift.

The Cac 40 gained 17 points to close at 3,820. Overall market sentiment remains bullish, although there is little fresh news providing direction for investors, said a trader at BNP Equities in Paris.

"The dollar's up a bit, the New York market is looking strong, the bombing of Iraq is over, and it looks like the US Senate may not push for Clinton's resignation," he said.