The prime minister of Iraq's autonomous Kurdish region, Barham Saleh, criticised "unilateral" Turkish military action against suspected rear-bases for Kurdish rebel attacks inside Turkey involving two ground incursions since mid-June.

But Iraqi Kurdish leaders were determined not to allow the region to become a threat to the security of neighbouring countries, he added.

"The basic issue is joint security and the rejection of any actions that would complicate relations between the Kurds of this region and Turkey," Saleh said.

"We are committed to implementing the law and we don't want the Kurdistan region to be a base for any threat to anyone," he said.

"We are part of the region and security should be handled through bilateral cooperation because unilateral action will lead to no good for anyone," said the premier.

The rebel Kurdistan Workers' Party (PKK) has in the past month dramatically stepped up its 26-year armed campaign for self-rule in Kurdish-majority southeast Turkey, drawing retaliatory air strikes and ground incursions against its bases in the far north of Iraqi Kurdistan.

Washington has been promoting security cooperation between Ankara and Baghdad through a commission involving the three governments that met in the Turkish border town of Silopi on Tuesday.

"This was the first time that the Iraqi borders commander and the Turkish corps commander responsible for the Turkey-Iraq border have met. Both sides agreed to meet regularly," the US military said in a statement released in Baghdad on Wednesday.

"The meeting included visits to both Turkish and Iraqi border outposts as well as establishing dates for future meetings to discuss secondary border crossing points to enhance trade and sharing of border security information."

After the army suffered its bloodiest day in two years at the hands of the PKK earlier this month, Turkish Prime Minister Recep Tayyip Erdogan vowed to fight the rebels "to the end."

But Saleh called for a return by Ankara to its previous policy of opening up to its large Kurdish minority by boosting freedoms and investment in Turkey's impoverished southeast.

"The Turkish policy of opening to the Kurds is a great opportunity that should be seized," the Kurdistan regional premier said. "Violence only complicates the issue."

Turkey's state minister for foreign trade, Zafer Caglayan, who headed the business delegation said he hoped increased trade would help ease the tensions.

"Trade is the key of politics ... Improving business ties will eradicate the problems between us," Caglayan told Turkey's Milliyet daily ahead of the visit.

Turkish firms already provide some 80 percent of Iraqi Kurdistan's food and clothes, and trade rose 30 percent last year on 2008. Overall Iraq-Turkish trade, much of which passes through Kurdistan, amounted to seven billion dollars.

Turkish businesswoman Ferda Cemiloglu, who has been doing business in Iraqi Kurdistan ever since the region broke free of now executed dictator Saddam Hussein's control in the aftermath of the 1991 Gulf war, hailed Ankara's involvement in the trade delegation.

"This visit is a huge and brave step. It should have been done two decades ago," she said.

"Trade is a pioneering enterprise and especially here because it has led to the opening of Turkish consulates and was also served as a bridge to the minister's visit."

The 200-strong Turkish delegation was given a tour of an array of projects in the regional capital Arbil for which the autonomous government is seeking investment.

The minister also attended the opening of an Arbil branch of Bilkent University -- Turkey's first private higher education college.

Iraqi Kurdish analyst Repwa Karim Wali said Ankara had already shown its long-term commitment to boosting trade through the opening of branches of two Turkish state-owned banks -- Is Bank and the Agriculture Bank -- in the region.

"The projects they are discussing now, like a free zone and scheduled flights, require government involvement -- businessmen alone cannot take this sort of initiative," he told AFP.