FTSE 100 led higher by banks after Greek debt deal done

* FTSE rises as euro zone leaders agree Greece deal

* IAG gains after UBS upgrades stock to "buy"

* Alent jumps on a bid from Platform Specialty (Updates closing prices)

By Liisa Tuhkanen

LONDON, July 13 (Reuters) - Britain's top equity index hit atwo-week high on Monday, with banks among the best performers,after euro zone leaders agreed on a road map to a third bailoutfor near-bankrupt Greece.

The FTSE 100 index closed 1 percent up at 6,737.95points, with advances in banks - highly geared to marketdeclines - adding the most points to the index.

"I was 'long' on the market last week, betting that a Greekdeal would be reached, and the agreement on Greece has had anatural, positive kick-on effect for the banks," Central Marketstrading analyst Joe Neighbour said.

Shawbrook and HSBC rose the most amongbanks, gaining 4.6 and 2.1 percent respectively.

News of a deal with creditors was met with a measure ofrelief mixed with much anger in Greece, after it became clearthe country will have to swallow more austerity in what some seeas Berlin's attempts to humiliate Athens as a punishment for itsresistance to another round of cuts.

"It's generally seen by the markets at the moment as a donedeal, but clearly there will be some sort of politicalwranglings about this both domestically for [Greek PrimeMinister Alexis] Tsipras and his party and within the euro zoneregion as well," said London Capital Group analyst Brenda Kelly.

British Airways' owner International Consolidated AirlinesGroup (IAG) was the biggest gainer of the day inpercentage terms, rising 3.4 percent after UBS upgraded thestock to "buy" from "neutral".

Supermarkets Morrison, Tesco, Marks andSpencer and Sainsbury also rose, adding between3 and 1.7 percent.

"It is very much a relief rally, with a huge bend towardsthe defensive, and that is a lot of the reason why supermarketsare benefiting today," Kelly said.

Among mid caps, speciality chemical maker Alent soared 44.2 percent to a record high after a bid from U.S. peerPlatform Specialty, pushing the FTSE 350 Chemicals Index 3.2 percent higher.

On the downside, International Personal Finance plummeted 25.2 percent on proposed revisions to a creditamendment law in Poland, one of its biggest markets.

The FTSE 100 is up by 2.6 percent since the start of 2015,although the index is down over 5 percent from a record high of7,122.74 points reached in April. (Additional reporting by Sudip Kar-Gupta; Editing by LarryKing)