* U.S. budget impasse gives investors chance to buy back * If deal agreed, 10-year Bund yields could rise to 1.55 pct -analyst * Greek bonds under slight pressure after rally, finmin's comments By Ana Nicolaci da Costa and Alistair Smout LONDON, Dec 20 (Reuters) - German Bund futures firmed on Thursday as a stalling in U.S. budget discussions fueled demand for cheapened safe-haven bonds at the expense of riskier assets. Financial markets have for weeks been sensitive to any developments in talks aimed at averting the automatic triggering early next year of U.S. tax rises and spending cuts, which many fear would tip the world's top economy into a recession. A deal had looked within reach as the two sides made concessions, but the climate soured after Republicans announced plans on Tuesday to put an alternative tax scheme to a vote this week. On Wednesday, President Barack Obama threatened to veto the Republican measure if Congress approved it. After eight consecutive sessions of losses, German Bund futures were up 15 ticks on the day at 144.30, with volumes thinning out before Christmas and the end of the year. "The Bunds are trading off the U.S. news, which was negative overnight with regards to the fiscal cliff," Lyn Graham-Taylor, fixed income strategist at Rabobank, said. Greece's bonds came under slight pressure after a sharp rally in the previous session and as Finance Minister Yannis Stournaras said in the Financial Times the country was facing a critical year ahead. The Greek February 2023 bond yield was 8.7 basis points higher at 11.71 percent. It fell well over a point in the previous session as the European Central Bank decided to once again accept Greek debt as collateral at its funding operations. "Periphery-wise, there's a little bit of a systemic risk increase over Greece, with the finance minister saying we're not out of the woods yet," Graham-Taylor said. Ten-year Spanish yields were up 1 basis point at 5.28 percent and the Italian equivalent rose 2 bps to 4.41 percent. Political tensions in Italy and uncertainty over who will lead the country next drove Italian borrowing costs over ten years near to 5 percent last week after Prime Minister Mario Monti said he would resign early. Italy's president gave a strong indication on Wednesday that an election would be held in late February. DIRE CONSEQUENCES Though the outcome of the U.S. budget talks remains uncertain, analysts say the consequences of the "fiscal cliff" are potentially too dire for the White House and the Republicans not to achieve a compromise. "The risk is too high (that) we can have a strong sell-off in risky assets and that the U.S. economy will fall into recession, so they will try to find an agreement for the end of the year. They will push hard," Alessandro Giansanti, senior rates strategist at ING said. A deal would boost equity markets and safe-haven debt would sell off, driving German 10-year yields as high as 1.55 percent, he said. "The risks to the euro zone economy are still present in the market so they will not disappear because of (a) fiscal cliff agreement," Giansanti added, explaining why any bond sell-off would be limited. Failure to reach an agreement before the end of the year would push 10-year German yields towards 1.30 percent, he said.