By Carla Mozee, MarketWatch

European stocks turned higher Friday following reports that Greece's creditors were ready to offer the country a five-month bailout extension.

But Greek and European leaders still have a meeting ahead of them on Saturday aimed at steering Greece away from the fiscal precipice.

The Stoxx Europe 600 was up 0.3% to 397.55, with only the consumer-services sector moving higher. The index had been down by as much as 0.8% intraday.

European stock indexes began to pare losses and in some cases turned higher in afternoon dealings. Greece's creditors are planning to extend (http://www.marketwatch.com/story/greeces-lenders-plan-five-month-bailout-extension-reports-2015-06-26) the debt-laden country's bailout program by five months and release rescue funds of 15.5 billion euros ($17.38 billion), media reports said on Friday. The Guardian reported that documents, which would grant Greece an extension, were handed to eurozone finance ministers on Thursday, and will be reviewed before the group convenes for an extraordinary meeting on Saturday.

Greece's Athex Composite was up 2% at 797.439 after being down by more than 1% earlier in the session. Greek government bond prices remained higher, pulling down the yield on 2-year debt by 78 basis points to 20.55%, according to Tradeweb. The yield on 10-year bonds fell 18 basis points to 10.59%.

Germany's DAX 30 reversed course and swung 0.6% higher at 11,551.04, and France's CAC 40 turned 0.9% higher to 5,086.08.

In Madrid, the IBEX 35 moved up 0.9% to 11,415 and Italy's FTSE MIB gained 0.7% to 23,794.55. The U.K.'s FTSE 100 was off 0.3% at 6,786.69.

Cash-strapped Greece needs an economic-reform deal in place before it can tap a new round of bailout funds. If Greece misses a EUR1.5 billion ($1.68 billion) debt repayment due Tuesday to the International Monetary Fund, the Hellenic nation will immediately be in arrears (http://www.marketwatch.com/story/imf-greece-would-immediately-be-in-arrears-if-it-misses-june-30-payment-2015-06-25) on its debt to the institution, the IMF warned Thursday.

Greece's creditors have said they want a deal in place (http://www.theguardian.com/business/2015/jun/25/weekend-deadline-greece-after-negotiations-draw-blank) before markets open on Monday. Greek pensions, sales taxes and military spending are major areas of disagreement. Eurozone finance ministers were tasked to bridge the gap between the proposals from Greece and its creditors when they meet Saturday. German Chancellor Angela Merkel said that gathering should have "decisive significance." (http://www.marketwatch.com/story/greek-deal-talks-at-weekend-will-have-decisive-significance-says-merkel-2015-06-26)

In corporate news, shares of K&S AG (SDF.XE) rallied 31% after Canada's Potash Corp. (POT) (POT) proposed a takeover (http://www.marketwatch.com/story/ks-says-potash-has-submitted-acquisition-proposal-2015-06-25-16485272) of its fertilizer-business rival.

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