* World stocks set for biggest weekly rise in 3 years
* Euro pauses after 1 pct gains, eyes on summit
* Non-farm payrolls data onfirm U.S. uptick
* U.S. stock futures rise
By Sujata Rao
LONDON, Dec 2 (Reuters) - World stocks extended gains on Friday, on track for their biggest weekly gain since November 2008 as a key U.S. jobs release was in line with expectations, reinforcing the view that recovery in the world's biggest economy is gaining momentum.
Markets have posted strong gains after central bank moves earlier this week cut funding costs for banks and also signs that euro zone policymakers are working hard to resolve a compromise deal[ ID:nL5E7N11XQ] ahead of a Dec. 9 summit, viewed as make-or-break for the 12-year old single currency bloc.
World stocks on the MSCI all-country index were up 0.6 percent. The index is up 8.5 percent this week.
U.S. shares were poised for gains after data showed that the economy created 120,000 jobs last month, while the jobless rate dropped to a 2-1/2 year low of 8.6 percent, further evidence the economic recovery was gaining momentum.
"This is a pretty handsome looking report in my mind. "The U.S. has clearly turned a corner," said Eric Lascelles, chief economist at RBC Global Asset Management in Toronto.
S&P 500 futures rose 14.1 points while Dow Jones industrial average futures jumped 112 points, and Nasdaq 100 futures added 24.75 points, pointing to s strng open on Wall Street
The dollar, meanwhile, brielfy extended gains against the yen and was last at 77.861, up 0/2 percent on the day.