UPDATE 3-Qantas in Emirates tie-up talks; equity stake unlikely

* Talks limited to code-share agreement - sources

* Gulf carriers looking for edge in Australia market

* Qantas shares close up 9.6 pct (Adds industry sources, analysts, background)

By Jane Wardell and Praveen Menon

SYDNEY/DUBAI, July 26 (Reuters) - Australia's struggling Qantas Airways confirmed on Thursday that it is in talks with Dubai's Emirates about a potential alliance, as fast-growing Gulf carriers race to expand their passenger base.

The Australian Financial Review reported earlier that Qantas was in talks with Emirates on a deal to help its loss-making international division by giving the carrier access to greater numbers of passengers from Emirates' hub in the Middle East.

A final form of any deal could vary from a straightforward code-share arrangement - where airlines share some flights - to a more global revenue-sharing deal, the report said, citing unidentified sources.

Qantas confirmed talks with "Emirates, among others" while the Dubai government-owned carrier declined to comment.

Gulf-based industry sources said that the talks were limited to code-share agreement and that an equity stake in Qantas or any capital injection by Emirates was not on the agenda.