* World stocks rise; optimism over Greece supports
* Government debt loses safe-haven bid
* Pound weak but bounces from lows
By Jeremy Gaunt and Al Yoon, investment correspondents
LONDON/NEW YORK, March 2 (Reuters) - Global equities edged higher on growing expectations debt-stricken Greece will secure financial aid, while Britain's pound steadied from an earlier battering over political worries and high public debt.
U.S. and euro zone government bond prices slipped as optimism Greece would announce new austerity measures and win European Union financial support undermined the bonds' safe-haven allure.
World stocks as measured by MSCI <.MIWD00000PUS> rose almost 1 percent, supported by European shares and emerging markets. U.S. stocks also opened with a solid footing.
The European Commission said Greece must take additional measures to reach its deficit reduction target of 4 percent of gross domestic product in 2010. It said the Greek government was united and determined to do what was necessary to reach that target. For details, see [ID:nBRU010684]
"It looks like they are making efforts with Greece," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago. "It certainly doesn't look like the EU is abandoning them - they are trying to get something done,"
While equity markets are generally higher this month, they are struggling to sustain the rebound from January. Many are still in the red for this year and stocks no longer appear to be the one-way bet they were during last year's huge rally.
Wealth manager Sarasin said in a note that the rally is likely to continue but with corrections, prompting it to take some money off the table.
"Since the risks of setbacks are gradually increasing, we would use strong market phases to further reduce our equity positions," it said.
European equities in particular remain skittish about the state of euro zone finances, with Greece and other member states struggling to get to grips with ballooning debt.
"Earnings in general have been on the right side of things. But what is still going on in the background is the Greece issue," said Bernard McAlinden, market strategist at NCB Stockbrokers in Dublin.
In the U.S., the Dow Jones Industrial Average <.DJI> rose 30.23 points, or 0.29 percent, to 10,434.02. The Standard & Poor's 500 Index <.SPX> climbed 4.70 points, or 0.42 percent, to 1,120.41 and the Nasdaq Composite Index <.IXIC> increased 10.64 points, or 0.47 percent, to 2,284.21.
The pan-European FTSEurofirst 300 and Japan's Nikkei <.N225> each gained about half a percent.
POUND SLIDES
Part of the focus within Europe was shifting to Britain, where a general election to be called in the first half of the year was creating uncertainty about attempts to fix the country's public finances.
Sterling was under pressure, falling half a percent to a
session low of $1.4853 before recovering to $1.4912
On Monday, it slumped to a 10-month low of $1.4780. Although it later trimmed some losses, it still finished the day down 1.7 percent for its biggest one-day percentage fall in more than four months.
Investors worry that the election, due in months, may give neither the opposition Conservatives nor the ruling Labour Party a parliamentary majority, leading to a political stalemate.
In other currencies, the dollar rose against a basket of major trading-partner currencies, with the U.S. Dollar Index <.DXY> up 0.25 percent at 80.858.
The euro
Speculation that the EU would resolve Greece's fiscal situation and strength in stocks led traders to pare safe-haven bets on government debt.
Yields on benchmark 10-year Treasury notes
In energy and commodities prices, U.S. light sweet crude
oil
(Additional reporting by Joanne Frearson in London, and Chuck Mikolajczak in New York; Editing by Andrew Hay)