Turkey's President Abdullah Gul convened a high-level meeting with Prime Minister Erdogan, the army brass and several cabinet ministers to discuss Ankara's response to the Kurdistan Workers' Party (PKK) blamed for the attack, the Anatolia news agency reported.

Turkish Defence Minister Vecdi Gonul said a cross-border incursion to attack PKK bases in northern Iraq was on the table, but ruled out an imminent move.

"There are plans to cross border" but "not urgently", he told reporters in Kiev after talks with US Defence Secretary Robert Gates.

The United States, which opposes any Turkish unilateral military action, strongly condemned the latest violence in Turkey's southeast, and pledged cooperation with Ankara against PKK rebels.

"These attacks are unacceptable and must stop now. Attacks from Iraqi territory need to be dealt with swiftly by the Iraqi government and Kurdish regional authorities," Gordon Johndroe, the spokesman for President George W. Bush, said.

British Foreign Secretary David Miliband urged Turkey to resolve the dispute with Iraq through diplomatic means while his French counterpart called on Ankara for restraint.

Iraqi Prime Minister Nuri al-Maliki denounced the PKK attack in a written statement in Baghdad just hours after the Iraqi parliament passed a motion condemning Turkey's threat to stage a raid in Iraq's autonomous Kurdistan region.

Iraqi Kurdish leaders said they would rebuff an attack on their territory.

President Gul said Ankara was determined to rout the PKK, which is considered a terrorist group by much of the international community.

"As long as Iraq continues to abet terrorists, it is Turkey's right to wipe out (the PKK)," he said.

Hundreds spilled to the streets in several Turkish cities to protest against PKK rebels and their ever-increasing acts of violence.

Nearly 1,000 protestors carrying Turkish flags gathered in Istanbul's central Taksim area in an impromptu demonstration, chanting slogans against jailed PKK leader Abdullah Ocalan.

The Turkish general staff said in a statement that fighting erupted in a mountainous region in the province of Hakkari after PKK rebels infiltrated from northern Iraq and attacked soldiers on patrol shortly after midnight Saturday.

Sixteen Turkish soldiers were wounded in the fighting near the village of Daglica, almost on the Iraqi border in Hakkari province.

Clashes were continuing, with helicopters providing air cover, the army said. Troops were monitoring the rebels' escape routes and heavy artillery was pounding 63 likely targets, it said.

The general staff first reported 23 PKK rebels killed, then increased the number to 32, bringing the total number of dead in the fighting to 44.

A senior PKK leader in northern Iraq said the rebels had captured a group of soldiers, but Gonul swiftly denied the claim.

"There are no hostages," he said in Kiev.

Hours after the Kahhari attack, 17 civilians were injured in a mine blast also blamed on PKK rebels. The injured were travelling in a minibus which drove over the mine near Daglica, Turkish sources said.

Ankara says some 3,500 PKK fighters are based in northern Iraq, which they use as a springboard for attacks on Turkish territory.

It says the rebels are supported by Iraqi Kurdish leaders, a charge the Iraqi Kurdish administration strongly denies.

Earlier this week, Erdogan said he expected Baghdad to shut down all PKK camps on its territory and hand over rebel leaders.

But Iraq's president Jalal Talabani said on Sunday that Baghdad was unable to meet the demand.

"PKK's leaders are in Kurdistan's rugged mountains. The Turkish military... could not annihilate them or arrest them, so how could we arrest them and hand them to Turkey?" he asked at a news conference in Arbil.

Faced with rising rebel violence, Turkey says it is running out of options other than military action, with neither the United States nor Iraq doing enough to stamp out the rebel bases.

More than 37,000 people have been killed since 1984 when the PKK took up arms fighting for self-rule in Turkey's mainly Kurdish southeast.

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