London's top tier added 53.2 points to 6584, bolstered by the receding prospects of US strikes after Russia's call for the country to hand over chemical weapons to international authorities for destruction.
The possibility the Middle East will avoid further international conflict helped cut the price of oil, which fell more than a dollar a barrel to nearly 107 US dollars, in turn boosting airline stocks.
Brent crude dropped as low as 111.3 dollars a barrel in London.
Sentiment was also boosted by more signs of recovery for the Chinese economy, with impressive trade figures at the weekend followed by figures showing factory output grew in August at its fastest rate this year.
Industrial production rose 10.4%, accelerating from July's 9.7%, according to official Chinese data.
European markets powered ahead, with Germany's Dax up more than 2% and France's Cac 40 not far behind.
On the currency markets, the pound was fairly stable against the dollar at 1.57 US dollars, as well as the euro, at 1.19 euros.
Budget carrier easyJet was the steepest climber on the FTSE-100, up 7%, or 91p, to 1358p thanks to the fall in oil prices.
British Airways owner International Airlines Group was also among the top risers with a 14.3p increase to 319.8p.
Commodities and trading giant Glencore Xstrata also did well as it hiked plans for cost-cuts, saying it now expects to deliver at least two $2 billion (£1.3bn) of synergies in 2014 from its mega-merger, four times more than its initial estimate.
Shares in the mining titan rose 7.4p to 328.8p, up more than 2%.
But Premier Inn owner Whitbread fell more than 2%, or 78p, on the blue-chip index to 3138p after like-for-like growth slowed to 2.1% in the 11 weeks to mid-August, as its Costa coffee chain was hit by the July heatwave.
Drugs group GlaxoSmithKline was under pressure after US regulators published draft guidance that may lead to generic versions of its blockbuster respiratory inhaler Advair. Glaxo fell 41.5p to 1598.5p, adding to losses on Monday after its sale of soft drinks brands Ribena and Lucozade to Japan's Suntory for £1.3bn failed to fuel share gains.
A rally in the banking sector helped shares in taxpayer-backed Lloyds Banking Group jump to their highest level for three years - up 1.2 to 78p - fuelling speculation of imminent plans for the Government to start selling down its 39% stake in the group, possibly as soon as this week.
Other big risers on the FTSE 100 were Royal Bank of Scotland up 16p to 356p, up 14.3p to 319.8p and Carnival up 100p to 2450p.
Other big fallers on the FTSE 100 were Randgold Resources down 225p to 4689p, Fresnillo down 44p to 1225p and Whitbread down 78p to 3138p.