The accord will be signed Thursday, a member of the Iraqi delegation, Aydin Halid, said after talks between interior ministers Jawad al-Bolani of Iraq and Besir Atalay of Turkey, Anatolia news agency reported.

Under the agreement, Turkey would be allowed "hot pursuit" -- small-scale military operations across the border to hunt down militants of the Kurdistan Workers Party (PKK), but would need Iraqi authorisation beforehand, the NTV and CNN Turk news channels reported.

The two countries would also set up liasion offices along the border to coordinate their efforts against the PKK, the reports said.

Ankara has threatened a military incursion to strike at bases of the PKK in neighbouring northern Iraq if Baghdad and Washington fail to curb the rebels, who notably stepped up attacks inside Turkey this year.

In August, Iraqi Prime Minister Nuri al-Maliki and his Turkish counterpart Recep Tayyip Erdogan signed a memorandum of understanding on security cooperation that paved the way for an agreement.

Turkey says the PKK, listed as a terrorist group by Ankara, Washington and much of the international community, enjoys free movement in Kurdish-run northern Iraq, where it obtains weapons and explosives.

Turkey has accused the forces of Massud Barzani, who heads the autonomous Kurdish administration there, of tolerating the group and even providing it with weapons, possibly including ammunition received from the United States.

Observers here doubt whether the embattled government in Baghdad, which has virtually no authority in northern Iraq, can persuade the Iraqi Kurds to act against the PKK, whose 23-year armed campaign for self-rule in southeast Turkey has resulted in more than 37,000 deaths.

In June, the Turkish army said there were some 5,000 PKK rebels in total, an estimated 2,800 to 3,100 of them based in northern Iraq.

The PKK has notably stepped up its attacks in the east and southeast of Turkey this year and, in response, the army has reinforced its units in the region and amassed troops on the border with Iraq.

Washington has warned Ankara against an incursion into northern Iraq, wary that it may destabilise a relatively peaceful region of the country and fuel tensions between Turkey and the Iraqi Kurds, staunch US allies.