BRUSSELS (Reuters) - European leaders struck a deal to provide financial aid to Greece on Thursday, in an unprecedented move to stave off a broader crisis in the 16-nation bloc that shares the euro single currency.

The details of the package were not expected to be finalized until early next week, when EU finance ministers meet, but the bloc's leaders suggested it could include some form of loans to Greece to help it service its debt and avoid a damaging default.

As they announced the deal, EU leaders also urged Athens to make deep cuts to its budget deficit to restore confidence in its economy, and the broader euro zone, and prevent its fiscal crisis from spilling over to other high-debt states like Portugal and Spain.

"There is an agreement on the Greek situation," EU President Herman Van Rompuy told reporters gathered at a summit of leaders from the 27-nation EU in Brussels.

"Euro area member states will take determined and coordinated action if needed to safeguard stability in the euro area as a whole," he said.

The agreement was forged in talks between Van Rompuy, European Commission President Jose Manuel Barroso, French President Nicolas Sarkozy, German Chancellor Angela Merkel, European Central Bank President Jean-Claude Trichet and Greek Prime Minister George Papandreou.

Germany and France are expected to take the lead in providing support, in part because other big euro zone economies like Italy and Spain are themselves under financial pressure.

Economists said the plan, while short on details, was likely to enhance market confidence in Greece, which has seen its debt and equity markets hammered over the past month.

But it is also a clear sign that the bloc's fiscal rules have failed and raises "moral hazard" questions because Greece has a history of manipulating deficit figures to meet EU rules.

Until this week, EU leaders had avoided speaking openly about a bailout, fearful it might ease pressure on the government in Athens to enact tough austerity measures needed to bring down a deficit that hit 12.7 percent of gross domestic product (GDP) last year - more than four times EU limits.