UPDATE 2-European shares rise on trade optimism, Germany up 1%

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* China willing to make partial trade deal with U.S.

* U.S.-China trade talks set to resume on Thursday

* Bookmaker GVC rises as it raises FY forecast again

* Airbus slips, defence unit sees cash challenge (New throughout, updates prices)

By Susan Mathew

Oct 9 (Reuters) - German shares logged their best day in six weeks on Wednesday, leading the charge among European shares, as sentiment was lifted by signs of progress in U.S.-China trade relations a day ahead of high-level talks between the two parties.

Reports that China was still open to agreeing to a partial trade deal with the United States, and that Beijing was offering to increase its annual purchases of U.S. agricultural products, came as signs of compromise, but analysts remain skeptical.

"At first glance, recent news provides at least some reason to be a bit more optimistic about the U.S.-China trade talks," wrote Raoul Leering, head of international trade analysis at ING in a note.

"But there's scant evidence that the two sides are willing to change their positions enough to break out of the current deadlock."

Exporter-heavy German shares added 1% and the pan-European STOXX 600 index rose 0.4% recovering from Tuesday's 1% decline when hostility from both sides in the U.S.-China dispute dented sentiment.

A year into it, headlines from the trade war continue to inject volatility into markets, with STOXX 600 index giving up as much as it gains, putting it on course for a barely changed week.

Trade-reliant sectors such as technology stocks, auto and part makers and some luxury goods stocks were among the biggest boosts to the index.

Among the top performers was the owner of British gambling firm Ladbrokes, GVC Holdings Plc, which gained 5.1% after it raised its annual core earnings forecast for the second time in three months.

Along with a rally in Ryanair and easyJet after a day of steep falls, it lifted last session's worst performing travel and leisure sector 0.5%.

London's blue chips were among the markets that gained the least as the European Union said a Brexit deal was "very difficult" if not entirely impossible.

EU officials denied the bloc is preparing a major concession for Britain to secure a Brexit deal after a report by the Times newspaper said the EU was ready to offer a mechanism for the Northern Irish assembly to leave a new so-called Ireland backstop.

The deeply uncertain future of Brexit, coupled with mounting concerns around the economically damaging Sino-U.S. trade war, have knocked around 3% off the benchmark index so far this month, erasing its September gains.

Among other stocks, Airbus lost 0.3% after sources said the planemaker's defence and space unit issued an internal warning of significant challenges in meeting cash flow and other targets for 2019. (Reporting by Medha Singh and Susan Mathew in Bengaluru Editing by Bernard Orr and Matthew Lewis)