* TSX rises 26.51 points, or 0.21 percent, to 12,815.76 * Eight of 10 main index sectors advance * Talisman gains on Icahn stake * Manitoba Telecom falls after government rejects unit sale By John Tilak TORONTO, Oct 8 (Reuters) - Canada's main stock index climbed on Tuesday, boosted by hopes of a resolution to the U.S. debt crisis and a rise in Talisman Energy Inc after activist investor Carl Icahn disclosed a stake in the company. Talisman shares jumped in early trade before paring some of those gains to trade up about 1.5 percent. Late on Monday, Icahn said he had purchased about 61 million shares of the underperforming oil producer and may seek a seat on the company's board. Investors appeared more optimistic after signals of progress emerged in the U.S. fiscal standoff, from both Congress and the White House, with President Barack Obama saying he would accept a short-term increase in the country's borrowing authority to avoid a default. The Toronto market also appeared less worried about the debt crisis, extending its gains to a third straight session. The market is not pricing in a worst-case scenario and is seeing a solution somewhat soon, but that's a reasonable expectation, said David Cockfield, managing director and portfolio manager at Northland Wealth Management. "Nobody is totally panicked," he said. "In the meantime, you sit on your hands." The Toronto Stock Exchange's S&P/TSX composite index was up 26.51 points, or 0.21 percent, at 12,815.76. Cockfield expects the benchmark index to reach 13,500 by the end of the year. Eight of the 10 main sectors on the index were higher on Tuesday. Financials, the index's most heavily weighted sector, climbed 0.2 percent. Royal Bank of Canada, the country's biggest lender, gained 0.2 percent to C$66.64. Energy shares benefited from rising oil prices. Canadian Natural Resources Ltd added 1.2 percent to C$32.55, having the biggest positive influence on the index. Encana Corp climbed 1.1 percent to C$17.86, and Talisman was up at C$13.35. With the price of bullion rising, shares of gold miners climbed. Goldcorp Inc rose 1 percent to C$26.32. But shares of Manitoba Telecom Services Inc slipped 7.6 percent after the company said late on Monday the Canadian government rejected the proposed sale of its Allstream division to Accelero Capital Holdings due to "unspecified national security concerns."