* Spain negotiating aid with euro partners-sources * Bunds rise, in middle of three-month range * Uncertainty over next policy moves dominates markets * Greek euro exit worries back in focus By Marius Zaharia LONDON, Aug 24 (Reuters) - German Bund futures rose on Friday, as uncertainty over how euro zone policymakers will attempt to make Spain's borrowing costs affordable supported safe-haven assets and worries over Greece kicked in. Sizable gains this week took Bunds to just above the middle of the range between July's highs and August's lows. Some analysts said they could rise further in the near future unless Spain and the European Central Bank clarified their plans. Spain is negotiating with its euro zone partners over conditions for financial aid but has not made a final decision to seek a bailout, euro zone sources told Reuters on Thursday. Such a move may be enough to persuade the ECB to resume buying Spain's bonds in secondary markets to lower its borrowing costs, but uncertainty remains over when that might happen and how forceful it would be. The risk that Greece may not receive its next tranche of bailout cash also came back into focus. The "troika" of international lenders will go to Athens next month to see how far behind Greece is in meeting the terms of its programme. Greek Prime Minister Antonis Samaras is due to meet German Chancellor Angela Merkel on Friday and French President Francois Hollande on Saturday, hoping to negotiate better terms, but the reception is likely to be tough. "The market is getting a bit nervous," ING rate strategist Alessandro Giansanti said. "There are worries that Greece at some point will not receive (further aid)...and may be forced to leave the euro and Spain is close to a fully-fledged bailout." Bund futures were last 44 ticks higher on the day at 143.94, with 10-year cash yields down 3.8 basis points at 1.337 percent, having traded in a roughly 1.2-1.6 percent range over the European summer. TREATING SYMPTOMS Sanjay Joshi, head of fixed income at London and Capital, which manages around $3.5 billion, said he was "constructive" on Bunds going into event-packed September as any potential sell-off was likely to be short-lived. "First, you have a weakening German economy ... and second, bringing down the cost of capital-raising in the periphery is (treating) only a symptom of the crisis and not the underlying problems," Joshi said. Also, the disbursement of a further tranche in Greece would not "dramatically change the economic dynamics" there. ING's Giansanti said Bund yields could move closer to 1.2 percent in the near term, but new record lows were unlikely in the absence of "shock events" such as Greece leaving the euro. Another concern for markets is the resumption of peripheral debt supply next week with Italy coming back to the bond market on Thursday after a month of absence. Traders said domestic investors had already started to make room for the new paper, with Italian 10-year yields up 6 bps at 5.76 percent and equivalent Spanish yields up 5 bps at 6.43 percent. "The fact that we have supply coming up means that we will start next week in a 'risk off' (mood)," ING's Giansanti said.

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