* Lack of a Greek aid payment sends euro down 0.1 pct
* European shares pare losses on hopes a Greek deal will emerge
* Yen hits 7-month low vs dollar as economy weakens
* Brent oil jumps $1/brl on clashes between Gaza and Israel
By Richard Hubbard
LONDON, Nov 21 (Reuters) - World shares and the euro were rocked on Wednesday by the failure of Greece's international lenders to reach agreement on releasing emergency aid, though prices stabilised on efforts by politicians to reassure markets that a deal was close.
Euro zone finance ministers, the International Monetary Fund and the European Central Bank will gather again on Monday after nearly 12 hours of talks through the night failed to reach a consensus on how to bring Greece's debts down.
After the meeting ended, French Finance Minister Pierre Moscovici said a deal was just "a whisker away", while European paymaster Germany said a plan to provide Greece with funding until 2016 was being developed.
The euro area's blue chip stock index, the Euro STOXX 50 , which fell 0.3 percent in early trading, recovered to be up 0.1 percent at 2,511.50 points.
"The old worries about the euro zone show investor sentiment remains on a knife edge", said Richard Hunter, head of UK equities at Hargreaves Lansdown.
In the main European centres the German DAX and France's CAC-40 indexes were up around 0.2 percent while London's FTSE 100 was unchanged.
Stock index futures pointed to a flat-to-higher open on Wall Street for its last session before the Thanksgiving holiday.
"Until such time as we get a little bit of clarity on when this Greek aid is released ... I think markets, especially since we're heading into Thanksgiving tomorrow, will trade fairly quietly", Michael Hewson, senior markets analyst at CMC Markets, said.
The euro followed a similar path, initially falling 0.5 percent when the meeting on Greece broke up without a deal, only to recover to be little changed at around $1.2810.
Prices for German debt, the safest in the euro zone, had eased slightly, sending 10-year yields down 0.6 basis points to 1.41 percent.
However, a sale of 3.25 billion euros ($4.2 billion) of new German 10-year debt, which paid an interest rate of 1.5 percent, drew solid demand from investors worried about the outlook.
World equity markets had come under pressure before the Greek delay by a warning from Federal Reserve Chairman Ben Bernanke on Tuesday that the central bank lacked the tools to cushion the impact of a potential U.S. fiscal crisis.
The Fed chief said worries over how the current budget negotiations, aimed at preventing a series of mandatory tax increases and spending cuts early next year, had already damaged growth in the world's largest economy.
Bernanke's comments snapped a two-day rally on Wall Street, but gains in Asian markets and the recovery in European shares left MSCI world equity index unchanged at around 324.1 points.
Asian shares had initially fallen in reaction to the Greek aid payment delay but recovered to close with small gains due to a rise in mainland Chinese markets and in Tokyo.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.3 percent, while Japan's Nikkei stock average closed up 0.9 percent at a two month-high.
The Nikkei's gains came as shares in exporters rose after the yen hit a seven-month low against the dollar on expectations that a new government will aggressively push the Bank of Japan to expand monetary stimulus.
Japan's opposition Liberal Democratic Party, tipped to win next month's general election also promised to boost spending as it emerged that exports had fallen in annual terms for a fifth straight month in October.
The yen hit a low of 82.30 to the dollar, its weakest level since early April.
The euro's softness and the weaker Japanese yen lifted the dollar by 0.1 percent against a basket of key currencies, which weighed on commodities such as gold, which fell 0.15 percent to $1,725.50 an ounce.
In the oil market Brent crude rose more than $1 a barrel as concern about the lack of aid to Greece was offset by fears of supply disruption from the Middle East, after an explosion on a Tel Aviv bus in Israel intensified fears of the conflict with Gaza worsening.
"There are opposing forces where the uncertainty in Europe and the United States meets with the bullish uncertainty in the Middle East ... so I think we're going to see a volatile market," said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong.
Brent crude futures were up $1.07 cents at $110.90 a barrel, off an earlier session-high of $111.08. U.S. crude rose 71 cents to $87.46.