UPDATE 2-Decisive UK election, trade deal lift European shares close to record high

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* U.S.-China agree on text of phase one trade deal

* UK mid-caps touch record high

* Brexit-sensitive airlines rally
(Adds trade details, Updates prices to close)

By Susan Mathew

Dec 13 (Reuters) - A breakthrough in U.S.-China trade talks
and hopes of an orderly Brexit after a landslide election
victory for UK Prime Minister Boris Johnson lifted Europe's
benchmark share index to within striking distance of an all-time
high on Friday.

China and the United States have agreed on the text of a
"phase one" trade deal, Beijing said on Friday. China said it
had agreed to step up purchases of U.S. agricultural products,
while U.S. President Donald Trump said Washington would suspend
tariffs on Chinese imports scheduled for Sunday.

The pan-European STOXX 600 closed up 1.1%, buoyed
by the major step forward in resolving a trade war that has hit
global supply chains and roiled markets for over 16 months.

The UK-focused FTSE mid-cap index jumped 3.4%, after
touching a record high earlier in the session, as the
Conservative Party's election win raised hopes Johnson will
deliver Brexit within weeks, ending 3-1/2 years of uncertainty
and fears of a disorderly break with the EU.

"Two of the biggest stumbling blocks for European markets
have been removed on the same day," said Peter Dixon, chief UK
economist at Commerzbank.

The benchmark European index closed just shy of a record
high hit in 2015. It is also on track to end the year more than
20% higher, its biggest annual gain in a decade.

But, stocks pared some early gains as investors took in the
trade news with caution, as the deal is yet to be signed.

Export-reliant German stocks closed up 0.5%
well-off session highs, held back also by a 3.7% slump in Henkel
as it warned of a dip in operating margin at its
adhesives business next year.

London's blue-chip FTSE 100 advanced 1.1% as gains
in banks and consumer goods helped the export-heavy index shrug
off the impact of a surge in sterling, which typically weakens
sentiment towards internationally focused companies.

"Completing the Brexit process remains a Herculean task that
will take considerably longer than the eleven months currently
planned, but in the near-term we are likely to see UK equities
move higher alongside sterling," said Karen Ward, chief market
strategist, EMEA, at J.P. Morgan Asset Management.

The European travel and leisure index added 3.6%,
boosted by rallies in Brexit-sensitive airline stocks such as
easyJet, International Consolidated Airlines Group
, and Ryanair Holdings plc.

Dublin's ISEQ, also considered a barometer of Brexit
sentiment, jumped to a 12-year high.

Italian shares, however, closed 0.3% lower, as the
banking index dropped 1.4% to log its worst day in a
month. Prime Minister Giuseppe Conte said there was no need for
state to help any Italian bank at present.

In corporate news, Delivery Hero gained more than
23.3% as it agreed to buy South Korea's top food delivery app
operator Woowa Brothers for $4 billion and form a joint venture.
(Reporting by Medha Singh in Bengaluru; Editing by Patrick
Graham and Mark Potter)