* European shares turn sharply lower, down more than 1 pct
* Dollar rises from four-month low, bond prices fall
* Oil up, gold futures lower
By Herbert Lash
NEW YORK, March 7 (Reuters) - U.S. equities and other risk assets pared gains on Friday as uncertainty over Ukraine tensions outweighed stronger-than-expected U.S. jobs growth, leading investors to pull money before the weekend.
Stocks on U.S. and world markets, after moving higher earlier in the week on views the Ukraine crisis would reach a diplomatic settlement, pulled back despite a surprisingly strong U.S. jobs report for February.
U.S. employers added 175,000 jobs to their payrolls last month after creating 129,000 new positions in January, the Labor Department said in a report that suggested the Federal Reserve would stay the course with its planned reduction of monetary stimulus.
However, even as job growth accelerated sharply, the unemployment rate rose to 6.7 percent from a five-year low of 6.6 percent.
President Vladimir Putin rebuffed a warning from U.S. President Barack Obama over Moscow's military intervention in Crimea, saying on Friday that Russia could not ignore calls for help from Russian speakers in Ukraine.
Putin said in a statement after an hour-long telephone call that Moscow and Washington remain far apart, giving investors a reason to take money off the table before the weekend.
Equity managers were taking the opportunity to raise some money, said Ken Polcari, director of the New York Stock Exchange floor division at O'Neil Securities in New York.
"It's Friday, you are going into the weekend, you still have the Ukrainian thing - Putin in not necessarily just bowing here - so you still have that headline risk over the weekend," he said.
MSCI's all-country world equity index retreated to trade 0.4 percent lower after earlier trading just off peaks last seen at the end of 2007.
The pan-European FTSEurofirst 300 turned sharply lower and was last down 1.26 percent at 1,327.67.
On Wall Street, the Dow Jones industrial average was up 24.25 points, or 0.15 percent, at 16,446.14. The Standard & Poor's 500 Index was down 1.53 points, or 0.08 percent, at 1,875.50. The Nasdaq Composite Index was down 20.92 points, or 0.48 percent, at 4,331.20.
The dollar rose, lifting the greenback from a four-month low. The dollar index, a composite of six currency pairs, traded 0.1 percent higher at 79.744. It earlier hit a bottom of 79.433 last seen on Oct. 29.
The dollar was up 0.24 percent against the yen at 103.31 yen and flat against the euro, which was up 0.04 percent at $1.3863.
U.S. Treasuries' yields rose to their highest levels in six weeks after the jobs report eased fears of an abrupt slowdown in economic growth, keeping views intact that the Federal Reserve will continue to reduce its monetary stimulus.
Benchmark 10-year notes dropped 18/32 in price, the yield rising to 2.81 percent, the highest since Jan. 23. It was last down 17/32 in price to yield 2.797 percent.
Gold futures for April delivery fell 1.0 percent to$1,338.10 an ounce.
Global benchmark Brent was up 76 cents at $108.86 a barrel. U.S. crude was up $1.10 at $102.66.