Shares, dollar pare losses after Iraq sell-off

(Reuters) - World shares and the dollar fell on Friday and oil and gold rose after President Barack Obama authorised targeted air strikes in Iraq, stoking fears of another drawn-out conflict in the region.

Fighting also resumed in Gaza between Palestinian militants and Israel while NATO's calls for Russia to "step back from the brink" of war in Ukraine were still ringing in ears of volatile markets.

"Earlier this week, one Iraqi in the area cried to the world, 'There is no one coming to help'," said Obama, who has been reluctant to go back into Iraq having withdrawn in 2011. "Well, today America is coming to help."

Global share markets had already been heading for a second week of straight losses but the latest developments sparked a fresh sell-off.

European stocks fell more than 1 percent after similar falls in Asia though they had begun to claw back ground as the start of U.S. trading neared.