CORRECTED - UPDATE 2-Intel to pay AMD $1.25 bln, settle all disputes

(Corrects fifth paragraph to show analyst works at FTN Equity Capital Markets, not FTC Equity Capital Markets)

* Agree to five-year cross-licensing deal

* AMD to drop all complaints, litigation against Intel

* Dispute stretches back 12 years

* U.S. Federal Trade Commission reviewing the settlement

* AMD shares up 20 pct, Intel shares edge higher (Adds FTC statement, analyst and executive comment)

By David Lawsky

SAN FRANCISCO, Nov 12 (Reuters) - Intel Corp (INTC.O) will pay rival chipmaker Advanced Micro Devices Inc (AMD.N) $1.25 billion to settle all outstanding legal disputes, in a move that could weaken antitrust authorities' cases against Intel.

Shares of AMD jumped 20 percent on Thursday on news of the payment, which analysts expect the loss-making chipmaker to use to pay down some of its $3.2 billion of debt. Intel shares edged higher.