TREASURIES-U.S. bonds tumble on upbeat data, hopes on Greece deal

* Greece's Tsipras accepts some conditions for debt deal

* But Tsipras urges voters to reject deal at referendum

* Upbeat data revive bets on U.S. Fed rate increase

* U.S. bond market suffered worst quarter in two years

(New (KOSDAQ: 160550.KQ - news) throughout, updates prices and market activity, adds

comment from portfolio manager)

By Richard Leong

NEW YORK, July 1 (Reuters) - U.S. Treasuries prices fell on

Wednesday as hopes for a Greece debt deal prompted investors to

pare safe-haven bids, while a stronger-than-expected report on

private jobs growth revived bets on a Federal Reserve rate hike

later this year.

A poor five-year German Bobl note auction stoked selling in

core European fixed-income. Analysts said this spilled into the

U.S. bond market, which had had just finished its worst quarter

in two years in terms of total returns.

Greek Prime Minister Alexis Tsipras has told international

lenders his government could accept their bailout offer if some

terms were changed in advance of a Sunday referendum on the

aid-for-reforms deal. Tsipras urged Greeks to reject the

conditions of a bailout in a bid to force creditors to loosen

terms.

"A 'no' vote adds more ambiguity. That's a bigger negative

for markets," said Jim Caron, fixed-income portfolio manager at

Morgan Stanley Investment Management in New York.

Still traders viewed these latest developments on balance as

progress toward a solution that keeps Greece in the euro zone

and averts strain on worldwide financial markets.

In late U.S. trading, benchmark 10-year Treasuries notes

were down 25/32 in price to yield 2.424 percent, up

9 basis points from Tuesday.

The 30-year bond fell 1-26/32 in price, yielding

3.202 percent up 10 basis points from Tuesday.

The U.S. Treasuries market lost 1.58 percent in the second

quarter, its biggest drop since a 1.92 percent loss in the

second quarter of 2013, according to an index compiled by

Barclays (LSE: BARC.L - news) .

Upbeat domestic economic data also spurred selling in

Treasuries.

Payrolls processor ADP said U.S. companies added 237,000

jobs in June, the most since December.

The Institute for Supply Management said its index of

national manufacturing activity rose to 53.5 in June, the

highest level since January, while the government said

construction spending rose 0.8 percent in May to its highest

level in just over 6-1/2-years.

Evidence the U.S. economy is rebounding from its

first-quarter slowdown could give the Fed more impetus to hike

interest rates from near-zero levels, analysts said.

These reports came a day before the government's payrolls

report for June. Economists polled by Reuters expected that

employment growth slowed to 230,000 jobs in June from 280,000 in

May. The unemployment rate was forecast to slip to a seven-year

low of 5.4 percent from 5.5 percent.

U.S. financial markets will close on Friday for the Fourth

of July holiday.

(Reporting by Richard Leong Editing by W Simon and David

Gregorio)