The fighting erupted late Monday when troops patrolling a mountainous area in Van province, near the Iranian border, encountered militants from the separatist Kurdistan Workers' Party (PKK), the sources said.

Last month, the PKK said it was extending a unilateral truce by six weeks until September 1 in anticipation of peace proposals by its jailed leader Abdullah Ocalan.

But Ankara, which lists the PKK as a terrorist group, has never recognised such truces and military operations against the rebels have continued.

The PKK took up arms for self-rule in Turkey's Kurdish-majority east and southeast in 1984, sparking a conflict that has claimed about 45,000 lives.

The government is currently working on a package of reforms to expand Kurdish freedoms in a bid to win over the restive community and erode popular support for the PKK.