"Economic development will strengthen our unity and heal social wounds," Erdogan told a crowd in Diyarbakir, the largest city in the region.

"These new projects will heal the wounds that separatist terrorists have manipulated for years," he said.

Erdogan said the government would expand irrigation networks, build new dams and boost incentives and loans for entrepreneurs and farmers.

Large swathes of land along the Syrian border will be demined and opened to organic farming, he said, vowing to build more hospitals, schools, boarding houses and universities.

Ankara is under pressure to step up efforts to tackle chronic poverty in the southeast, where the Kurdistan Workers' Party (PKK), listed as a terrorist group by much of the global community, has waged a bloody separatist campaign since 1984 which has claimed more than 37,000 lives.

Turkey has stepped up military action against the PKK since December, conducting several bombing raids and a week-long ground offensive against rebel camps in neighbouring northern Iraq.

"The solutions to the problems lie in more investment and production and in more democracy and freedom," Erdogan said.

An earlier government promise to inaugurate a special television channel to broadcast in Kurdish as well as Farsi and Arabic will soon materialise with parliament currently debating a bill to that effect, he said.

The public TRT television already launched limited Kurdish-language broadcasts in 2004 in a move aimed at boosting Turkey's bid to join the European Union.

Erdogan had earlier said the government is planning to invest up to 15 billion dollars (9.56 billion euros) over five years in the southeast.

Kurdish activists have also called for a general amnesty for PKK rebels to encourage them to lay down their arms, a proposal the government categorically rejects.