* Bonds rise as bailout doubts feed bid for safe havens

* Germany's Merkel says few in G20 sign on to bailout fund

* US job report shows improvement, unemployment rate dips

By Herbert Lash

NEW YORK, Nov 4 (Reuters) - Global stocks and the euro fell on Friday as new doubts about Europe's bailout package and worries over the outcome of a key vote in Greece overshadowed signs of improvement in the U.S. labor market.

Greek Prime Minister George Papandreou faces a vote of confidence Friday night, with the fate of the nation's deal on a euro zone debt bailout and the global economy in the balance.

Analysts declared the outcome too tight to forecast, but had a hunch Papandreou might just survive the vote, which is expected as late as midnight in Athens (2200 GMT).

The bid for safe-haven assets rose, with government debt on both sides of the Atlantic gaining after German Chancellor Angela Merkel said few countries in the Group of 20 leading economies had committed to the euro zone rescue fund.

Merkel's comment eclipsed relief over the decision by Greece on Thursday to ditch controversial plans to hold a referendum on its bailout, a development that initially had calmed fears of an imminent sovereign debt default.

Merkel's comment highlighted the fragility of deal reached to rescue Greece. At the heart of the deal is a plan to leverage the euro zone's rescue fund to give it firepower of 1.0 trillion euros.

Trading has been volatile on quickly changing news from Europe. The U.S. S&P 500 has experienced daily swings of more than 1.5 percent this week. The benchmark index, which posted its best month in 20 years in October, was on track to post its first down week in five.

"There's too much uncertainty going on. What Greece has taught us this week is that just when you think things are certain, they're actually not," said Camilla Sutton, chief currency strategist, at Scotia Capital in Toronto.

World stocks measured by the MSCI all-country world index pared losses to rise 0.1 percent.

In Europe, the FTSEurofirst 300 index of top regional shares slid 1.0 percent to 980.01, erasing early gains. The index posted its first weekly loss in six weeks.

Italian banks UniCredit and Intesa SanPaolo , heavily exposed to Italy's sovereign debt, fell 6.6 and 4.8 percent, respectively.

Italian Prime Minister Silvio Berlusconi, who is facing pressure to step down, turned down an offer of funding from the International Monetary Fund, which has placed the country under supervision as it struggles with its debt mountain.

"The Italian bond yield is the only game in town. If this trend continues, we've got serious problems. It's not sustainable. There's no reason to take any more risk at the moment," said David Coombs, fund manager at Rathbone Brothers, which has 15.2 billion pounds ($24.2 billion) under management.

On Wall Street, the Dow Jones industrial average was down 68.87 points, or 0.57 percent, at 11,975.60. The Standard & Poor's 500 Index was down 7.11 points, or 0.56 percent, at 1,254.04. The Nasdaq Composite Index was down 6.52 points, or 0.24 percent, at 2,691.45.

Stock sectors most exposed to weakness in European banks and tied to growth, such as industrials, financials, materials and energy were among the weakest.

Signs of some improvement in the U.S. labor market failed to lift the market. Labor Department data showed U.S. hiring slowed in October but the unemployment rate hit a six-month low and job gains in the prior two months were stronger than previously thought, pointing to some improvement in the still-weak labor market.

Shares of daily deals site Groupon Inc rose more than 50 percent in their stock market debut, but at least some of the early trading exuberance may have come from limiting the fraction of the company that was sold.

The euro slid against the dollar as uncertainty persisted about the European Union's bailout program. The euro fell 0.1 percent to $1.3793 .

The December Bund future settled up 73 ticks, while the benchmark 10-year U.S. Treasury note rose 5/32 in price to yield 2.06 percent.

Italian two-year government bond yields jumped and the spread of Italian 10-year yields over Bunds hit a new lifetime high.

Crude oil prices rose in choppy trade.

Brent futures were up 91 cents at $111.74 a barrel. U.S. light crude futures were up 26 cents at $94.33 a barrel.

Spot gold prices fell $7.01 to $1,755.60 an ounce.