LONDON, March 5 (Reuters) - Ukraine's international

bonds rallied on Wednesday in volatile European morning trade

after U.S. President Donald Trump said Kyiv was ready to

negotiate over the war with Russia.

The country's bonds have whipsawed in recent days,

responding to Trump's statements and actions, including his

freezing of U.S. military assistance, as he seeks an end to the

war begun by Russia's full-scale invasion just over three years

ago.

The 2035 maturity rallied by more than 1.70 cents before

retracing to be bid at 62.18 cents on the dollar, 0.88 cents

higher - with other maturities making similar gains.

The bonds returned over 60% in 2024 when Trump was elected

to return to the White House, which investors attributed to his

promises of a quick end to the conflict.

But his administration's decision to hold peace talks with

Russian officials without Ukraine present - and his explosive

Oval office meeting with Ukrainian President Volodymyr Zelenskiy

on Friday - tested that optimism and drove bonds lower.

The bonds that will pay out more if future economic

performance outpaces expectations have led both the gains and

the losses. The 2035 maturity, while trading 7 cents below its

February 14 peak, remains more than 14 cents above the level

just before Trump's election victory last year.

Goldman Sachs calculations showed that market expectations

for a strong rise in Ukrainian economic growth, which would

require an end to the war, had declined by 10 percentage points

since Friday. Based on the pricing of Ukraine's GDP-linked bond

versus other instruments, the bank said the market was still

pricing at least 40% odds of a peace deal.