"We have said several times that the leaders of the PKK are not staying in Kurdish cities of Iraq but they live with 1,000 (eds: correct) of their fighters in the rugged Qandil mountains," said a statement issued by the office of Talabani, who is himself a Kurd.

"It is impossible to arrest them and deliver them to Turkey."

The Qandil mountains are located along the Iraq-Turkey border, north of the city of Sulaimaniyah, a stronghold of Talabani's Patriotic Union of Kurdistan party.

Earlier Wednesday, a government source in Ankara said Talabani had told Turkish Foreign Minister Ali Babacan that the possibility of extraditing rebel leaders existed.

"Talabani told Turkish Foreign Minister Ali Babacan that he did not exclude the possibility of extraditing members of the Kurdistan Workers' Party," when the two men met in Baghdad on Tuesday, the source said.

In response, Babacan said it would be a "good first step" if Iraq extradited some 100 rebels whose names are on a list Ankara handed to Baghdad earlier this year, the source said, speaking on condition of anonymity.

The issue will be taken up during talks in Ankara on Thursday with an Iraqi delegation consisting mostly of security officials, he added.

Turkey has long demanded that Iraq prevent the PKK from using its territory, halt all rebel activities, limit their movements, close down their camps, cut off their logistic support and hand over their leaders to Turkey.

Exasperated over what it sees as US and Iraqi failure to stamp out the PKK presence in its war-torn neighbour, the Turkish government last week obtained parliamentary approval to conduct cross-border raids into northern Iraq.

Tensions between Ankara and Baghdad rose sharply after a PKK attack on a military patrol near the border on Sunday killed 12 Turkish soldiers.