* German parliament approve Greek aid
* But questions over debt buyback underpin German Bunds
* Technical charts hint at rise to Bund range high
* Spanish bond yield edge up as ICO issue seen faltering
By Emelia Sithole-Matarise and William James
LONDON, Nov 30 (Reuters) - Greek bonds rallied on Friday after German lawmakers approved the release of more aid to the near-bankrupt country but doubts over some aspects of the deal underpinned demand for high-liquid German debt.
The approval by the German parliament was a key step towards the release of funds to Greece after its international lenders approved a deal this week to cut its debt load by 40 billion euro to bring it down to 124 percent of national output by 2020.
Greek bond prices extended this week's rally across the strip with its 10-year yields falling 20 basis points on the day to 16.14 percent.
However, a broad-based relief rally in other peripheral bonds which pushed Italian 10-year yields to two-year lows showed signs of fatigue on questions over a Greek bond buyback scheme which has to be completed by Dec. 13 before the IMF can release its share of the aid tranche.
"There's relief the Bundestag (German lower house of parliament) has okayed the Greek bailout but they've just kicked the can down the road and not solved the problem. We still have these questions about the buyback," a trader said.
The bond buyback could save Athens more than 39 billion euros gross, according to Reuters calculations, but investors have become edgy over lack of clarity on how the operation will be funded and how repurchase prices will be decided.
German Bund futures, to which investors turn in times of stress, ended five ticks lower on the day at 142.79 but well off the 141.84 low reached on Tuesday after news of the Greek aid deal, while cash 10-year German yields settled unchanged on the day at 1.38 percent.
"Our view has been that we will see Bund yields rising towards year end as we get past the critical issues of Greece and Spain," said Marius Daheim, chief rates strategist at Bayerische Landesbank.
"But with these things being delayed either in the case of Greece (with the buyback) or in the case of the Spanish bailout request it might turn out that this risk-on rally may run out of steam. So we expect Bund yields to remain capped between 1.30-1.50 percent into year-end."
Technical charts also show support for Bund futures at 142.62, the mid-point of Tuesday's steep sell-off, and a shift in momentum indicators towards fresh rises.
"As long as 142.62 is support we're happy bulls and expecting an assault on 143.48," said Futurestechs technical analyst Clive Lambert.
Italian 10-year bond yields which plumbed a low of 4.485 percent on Thursday, settled five bps lower on the day at 4.51 percent. Spanish equivalents were 2 basis points lower at 5.33 percent but off an eight-month low of 5.21 percent reached on Thursday.
A trader said the peripheral rally may also have run its course for the near-term due to the looming risk that the U.S. economy could slip into recession if lawmakers fail to avert $600 billion of automatic spending cuts and tax hikes.