London's FTSE 100 index rose 0.72 percent to stand at 6,577.71 points in midday deals, Frankfurt's DAX 30 rallied 1.69 percent to 8,416.06 points and the CAC 40 in Paris jumped 1.30 percent to 4,092.98.
The European single currency eased to $1.3242 from $1.3250 late on Monday. The dollar rose to 100.03 yen from 99.59 yen.
On the London Bullion Market, gold prices retreated to $1,373.42 an ounce from $1,390.
 "Equity markets are rallying strongly ... as the market reacts to better than expected industrial production numbers out of Beijing and reduced tensions around Syria," said analyst Matt Basi at traders CMC Markets.
"It seems global leaders are unanimous on the need to follow UN protocol and direct their efforts to intervene in the crisis down the correct channels, which makes a refreshing change to the 'bomb first, argue later' approach that markets had feared."
 Traders seized on a possible breakthrough in the Syria crisis after Russia proposed a plan to avert a US-led strike on Damascus by securing a deal for the regime to destroy its chemical weapons.
US President Barack Obama said the move could be a "significant breakthrough", easing fears of an attack that many analysts fear could lead to a wider conflict in the Middle East.
Europe's major airlines also won a major boost from easing tensions.
In London, International Airlines Group, parent group of BA and Iberia, saw its share price gained 4.42 percent to 319 pence, and Easyjet leapt 5.45 percent to 1,336 pence.
German carrier Lufthansa soared 5.48 percent to 13.755 euros in Frankfurt.
"The easing of tensions in Syria -- due to the Russian comments and US President implying that military action may not be necessary -- has seen airline shares bounce as tourists could be more willing to travel around the general Middle East region," said Richard Hunter, analyst at Hargreaves Lansdown stockbrokers.
The Syria news also pushed oil prices lower, which in turn cuts the cost of jet fuel for airlines. Jet fuel, or kerosene, is refined from crude.
Asian stock markets also rose on Tuesday, with investors buoyed by a string of upbeat global economic data as well as signs that a US-led strike on Syria could be averted.
The Chinese stock market gained 1.15 percent after data showed that industrial production had expanded in August at its fastest rate in 17 months.
The main gauge of output at China's factories, workshops and mines increased 10.4 percent year-on-year in August, the National Bureau of Statistics (NBS) said.
That was the strongest growth since March 2012 and beat market expectations for a rise of 9.9 percent.
The news follow strong trade figures on Monday and add to recent results pointing to a pick-up in the world's number two economy and key driver of global growth.
Buying sentiment was also lifted by a Wall Street rally, while Japanese traders were still on a high after Tokyo's successful bid to host the Olympic Games in 2020.
The Japanese stock market grew 1.54 percent, adding to Monday's 2.48-percent rise.
Elsewhere, Hong Kong climbed 0.99 percent, Sydney was up 0.3 percent and Seoul won 0.98 percent in value.