The outlawed Kurdistan Workers' Party (PKK) "needs to lay down arms and they need to renounce violence," retired general Joseph W. Ralston, the US coordinator with Ankara in the fight against the rebels, told reporters.

"I am pleased they have done that as a first step, but that does not eliminate the problem. We still have the PKK operating in a sanctuary in Iraq," he said after talks with his Turkish counterpart Edip Baser.

The PKK, which has been fighting the Turkish army since 1984, ordered a unilateral ceasefire from October 1, saying it hoped this would pave the way for a dialogue to resolve the conflict.

But the truce, like the previous ones called by the PKK, was quickly rejected by Turkey.

The ceasefire came after a sharp rise in violence by the PKK, which Turkey says uses neighbouring northern Iraq as a springbroard for attacks on Turkish targets across the border.

The news of the first fatality since the truce came Thursday when officials said a Turkish soldier was killed in a clash with the southeastern province of Siirt, and two PKK rebels were killed in separate fighting in Sirnak province, also in the southeast.

Baser said he and Ralston discussed several "concrete proposals" against the PKK, including the closure of the Mahmur refugee camp, near the northern Iraqi city of Mosul.

Ankara has for years demanded that the UN-controlled camp, home to thousands of Kurds from Turkey, be closed down, saying it is controlled by PKK rebels who prevent families who want to return to their homes in Turkey from doing so.

Ankara has long pressed the United States and Iraq to stamp out the PKK presence in Kurdish-held northern Iraq, where it says the rebels enjoy unrestricted movement and easily obtain weapons and explosives.

But the United States and Baghdad have been reluctant to crack down on the rebels, saying they are swamped by violence in other parts of the country.

Washington has argued for other types of measures, such as cutting off the PKK's finances, before a military operation.

"The use of force is a very serious issue. It should not be a first option," said Ralston, a former supreme commander of NATO. "In the past, I have recommended the use of force when all other options have been exhausted."

Growing impatient, Ankara has threatened cross-border operations against PKK camps in Iraq, a move Washington opposed on grounds that joint action by United States, Turkey and Iraq would produce better results.

More than 37,000 people have been killed since 1984, when the PKK, classified as a terror organisation by Turkey, the United States and the European Union, took up arms for self-rule in the country's mainly Kurdish southeast.