TREASURIES-Yields fall as Ukraine prompts safety buying, ECB seen buying bonds

* Treasury yields fall as German bond yields fall to record

lows

* Ukraine tensions add safety bid

* Expectations ECB will buy bonds drives purchases

* Thirty-year bond yields lowest since May 2013

* Treasury to sell $29 bln 7-year notes

By Karen Brettell

NEW YORK, Aug 28 (Reuters) - U.S. Treasuries rallied on

Thursday and 30-year bond yields fell to their lowest in over a

year as concerns over tensions in Ukraine sparked safety buying,

and as European government yields continued to hit record lows.

Ukraine accused Russia on Thursday of bringing troops into

the southeast of the country in support of pro-Moscow separatist

rebels.

Expectations that the European Central Bank is likely to

start a bond purchase program when it meets next week have also

driven a strong rally in German government debt, which in turn

has led Treasury yields lower.

"It's all about Europe," said Ira Jersey, an interest rate

strategist at Credit Suisse (NYSE: CS - news) in New York. "At the moment

Treasuries seem to be at the whim of bunds."

Benchmark 10-year Treasuries were last up 7/32

in price to yield 2.33 percent, down from 2.36 percent late on

Wednesday. Thirty-year bonds gained 17/32 in price

to yield 3.07 percent, the lowest since May 2013 and down from

3.11 percent late on Wednesday.

German 10-year government bond yields hit record

lows of 0.87 percent.

Large demand from investors rebalancing portfolios this week

is also adding a bid to U.S. debt, traders said.

Treasuries yields rose slightly and very briefly after data

showed that the U.S. economy rebounded more strongly than

initially thought in the second quarter.

Gross domestic product expanded at a 4.2 percent annual rate

instead of the previously reported 4.0 percent pace, the

Commerce Department said, reflecting upward revisions to

business spending and exports.

The Treasury will sell $29 billion in seven-year notes on

Thursday, the final sale in $93 billion of new coupon-bearing

supply this week.

(Editing by Chizu Nomiyama)