Turkey was poised on Monday to strike against Kurdish rebels in northern Iraq but will give Washington a few days to try to curb the separatists.
Turkey has deployed as many as 100,000 troops, backed by tanks, F-16 fighter jets and attack helicopters along its border with Iraq in anticipation of a possible incursion, however Defence Minister Vecdi Gonul said: "They are planning a cross-border (incursion) ... We'd like to do these things with the Americans."
Turkey estimates 3,000 rebels from the Kurdish Workers Party (PKK) are based across the border and a series of recent attacks on Turkish forces has put intense pressure on Prime Minister Erdogan to act.
Turkey believes U.S. forces could, capture PKK leaders in the Qandil Mountains, shut down their camps and cut off supply routes and logistics support. But Washington is hesitant as such moves could destabilise Iraq's Kurdish region and hurt the regional authority there if it looked as if it were siding with Turkey against fellow Kurds.
Gonul, speaking in Kiev after meeting U.S. Defence Secretary Robert Gates, said 17 soldiers were killed and 10 were missing. The Turkish losses, among the worst in a decade, came four days after parliament overwhelmingly approved a motion to allow troops to cross into northern Iraq.
Erdogan chaired a weekly cabinet meeting on Monday, which was expected to focus on the fighting and a possible incursion. He was due in London later on an official visit.
The Turkish lira currency fell three percent to 1.2360 against the dollar and the Istanbul stock exchange fell five percent early on Monday on concerns of a cross-border offensive. Turkey's tougher stance has helped propel global oil prices to record highs over the past week. The PKK has said it might target pipelines carrying Iraqi and Caspian crude across Turkey.
U.S. President George W. Bush on Wednesday urged Turkey not to launch a major incursion into northern Iraq. He spoke after Turkey's parliament approved by a large majority a government request to allow troops to cross into northern Iraq to crush Kurdish rebels based there. The United States fears a cross-border incursion could destabilize the most peaceful part of Iraq and potentially the wider region.
"We are making it very clear to Turkey that we don't think it is in their interests to send troops into Iraq," Bush told a news conference.
The PKK says eight Turkish soldiers were captured in the weekend fighting. Turkish media said more than 200 rebels were involved in the clashes on the Turkish side of the border.
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