GLOBAL MARKETS-Stocks rise after Fed minutes as dollar slips

* ECB raises emergency funding cap to Greek banks - source

* Stocks in Europe at seven-year high

* U.S. 10-year yield falls to session low after Fed minutes (Adds close of U.S. markets, oil settlement prices)

By Chuck Mikolajczak

NEW YORK, Feb 18 (Reuters) - Global equity markets advanced on Wednesday while the dollar pulled back from earlier gains in the wake of the release of minutes from the Federal Reserve's policy meeting last month and on hopes a deal could be reached on Greek debt.

At the U.S. central bank's latest meeting, policymakers expressed concern that raising interest rates too soon could stall the U.S. economic recovery and debated the impact that low inflation measures were having on the Fed's confidence in proceeding with raising rates.

U.S. equities erased modest losses to close nearly flat while the dollar edged down to be nearly flat against a basket of major currencies as the Fed minutes damped down expectations for a rate hike as early as June.

U.S. Treasury debt prices jumped and the yield on benchmark 10-year notes fell to as low as 2.043 percent.

"The minutes reflect our view that while the economy is growing, an interest rate lift-off is not a slam dunk at this point," said Alan Gayle, senior investment strategist at Ridgeworth Investments in Atlanta (BSE: ATLANTA.BO - news) , Georgia.

"Clearly there are some more dovish members that feel the economy is still not strong enough to support steady pricing, so that is holding the Fed back from normalizing policy."

In Europe, stocks closed at multi-year highs as investors brushed off uncertainty over Greece's negotiations with its creditors.

The Greek government said it will submit a request to extend a "loan agreement" for up to six months on Thursday but Germany said no such deal is on the table and Greece must stick to the terms of its bailout.

The European Central Bank agreed to raise emergency funding available to Greek banks to 68.3 billion euros ($78 billion), a slight increase on the previous limit, a person familiar with the ECB talks said.

Producer price data for January indicated U.S. inflation remained subdued, which could boost the argument against a rate hike by the Fed, while other economic data pointed to a slowly accelerating U.S. economy.

MSCI (NYSE: MSCI - news) 's all-country world stock index gained 0.32 percent, while 10-year Treasuries were up 18/32 in price to yield 2.08 percent after touching a high of 2.164 percent.

The Dow Jones industrial average fell 17.73 points, or 0.1 percent, to 18,029.85, the S&P 500 lost 0.66 points, or 0.03 percent, to 2,099.68 and the Nasdaq Composite added 7.10 points, or 0.14 percent, to 4,906.36.

The FTSEuroFirst 300 index of leading European shares rose 0.73 percent to a fresh seven-year high of 1,515.90. Greek stocks recovered some of the week's losses to finish 1.1 percent higher.

Brent crude oil settled down 3.2 percent at $60.53 a barrel and WTI crude settled down 2.6 percent to $52.14 as rising inventories cut short a rally from earlier in the week. Brent is up about 35 percent from its low of near $45 a barrel barely a month ago. (Additional reporting by Sam Forgione; Editing by James Dalgleish)