Pressure also remains on the dollar after Federal Reserve Chairman Ben Bernanke kept alive talk of more monetary easing in his latest remarks to the U.S. Congress, though he played down the risks of a double-dip recession.

"There have been some good company results, which have lifted sentiment. But I don't think investors have been complacent as the euro zone situation is still in the background," said Keith Bowman, equity analyst at Hargreaves Lansdown.

The FTSEurofirst 300 index .FTEU3 of top European shares was up 0.3 percent at 1,056.80 points and on track for a seventh straight week of gains.

The euro traded around $1.2308, up about 0.2 percent, above a two-year low of $1.2162 hit last week.

Debt auctions later in the day by Spain and France promise to highlight the growing tensions within the euro area, with French yields set to touch record lows, while Spain's longer term borrowing costs hover near unsustainably high rates.

Spain should receive some good news later when the German parliament votes on the rescue program for its troubled banks, which should pave the way for a formal approval by euro area finance ministers on Friday.

The deadly bombing in Syria and an attack on Israeli tourists in Bulgaria, which have plunged the Middle East deeper into crisis, lifted Brent crude oil to a seven-week high above $106 a barrel.

(Reporting by Richard Hubbard; Editing by Will Waterman)

• A Permanent Economic Emergency