Although it is widely expected that a deal will be hammered out to avoid a messy Greek debt default when a 14.5 billion euro bond repayment falls due in March, the niggling doubts weighed on the euro zone's peripheral issuers, with Italian bonds leading the sell-off.

Greece's coalition parties must tell the European Union on Monday whether they accept the terms of a new bailout deal as EU patience wears thin with political dithering over implementing reforms.

"There's a lot of talk about the deadline today, but it's not a deadline for the deal, it's just for the politicians to give a nod, this is going to run and run," said ING rate strategist Padhraic Garvey.

Talks on the new bailout, which would be Greece's second since 2010 - and an accompanying deal to ease the country's huge debt burden via its private creditors accepting deep losses on the bonds they hold - have dragged on for weeks.

"We continue to see the likelihood of a Greek messy default as remote owing to the fact that the repercussions are as large as they are hard to determine," Rabobank rate strategists said.

"That said, continued brinkmanship and a dose of pre-electoral posturing in Greece itself stands to prompt further market jitters on this front over the immediate term."

March Bund futures were 76 ticks higher at 139.09 with 10-year yields 7.5 basis points lower at 1.86 percent.

Yields hit their highest in a week on Friday after data showed the US economy created jobs at the fastest pace in nine months.

UBS technical analyst Richard Adcock said Bund futures were vulnerable while futures traded below the 139.01 mid-point of last week's sell-off with a break below Friday's 138.13 a further bearish signal which could potentially allow a fall to January's 137.18 low.

Italian 10-year yields were 13 basis points higher at 5.84 percent.

"Spain and Italy have had a decent run in the last month or so and there's a little bit of people taking a few chips off the table and waiting to see what comes out of this Greek situation," a trader said.

Despite statements from euro zone officials that any Greek debt restructuring would be a one-off event and not a blue print for other struggling countries, Portuguese bond yields have hit euro-era highs in recent sessions with the country seen as the next most likely to take such a step.

IFR, a Thomson Reuters service, reported that Portugal has been sounding out advisors on options to restructure its debt.

The Portuguese yield curve flattened, with 10-year yields 34 basis points lower but two-year yields 51 basis points higher at 16.42 percent.

"Clearly once a deal is done for Greece, the market will begin to speculate on Portugal," Garvey said.

"But it is more likely that Portugal will negotiate a second aid package because it is practically impossible for them to come back to capital markets any time soon.