"There are plans to cross border" but "not urgently", Vecdi Gonul, the Turkish defence minister, told reporters after talks with Robert Gates, the US defence secretary.
The military said in a statement that "a large PKK group that infiltrated across our borders launched a three-pronged attack on an infantry company near the town of Daglica, and in the ensuing clash 12 soldiers were martyred and 16 soldiers were wounded."
The area of the attack is about 5km from the border with Iraq.
The Kurdistan Workers' Party (PKK) said that a number of Turkish soldiers were killed and captured during the fighting.
"I think it is pretty difficult to say troops shouldn't [invade] when the Turkish soldiers are being killed, and their villages attacked"
Celtic, Karlstad, Sweden
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"There were clashes between the two sides. We killed a large number of them. We took a group of Turkish soldiers as prisoners," Abdul Rahman al-Chadirchi, a PKK leader, told the AFP news agency.
Another source in the movement told Reuters news agency that the captives were being held inside Turkey rather than across the border in northern Iraq.
But the Turkish defence minister denied that any soldiers have been taken hostage by the separatists. "There are no hostages," he said.
The clashes came four days after Turkey's parliament authorised a cross-border raids against the PKK.
"Turkish media sources are telling us that the clash took place right on the border," Al Jazeera's Barnaby Phillips in Silopi, Turkey, said.
"We know that the Turkish military has been patrolling more and more agressively, more and more actively along the Iraqi border, and in a sense that means that these kinds of skirmishes and attacks are more likely to take place."
A PKK official told Al Jazeera that it attacked Turkish forces as they attempted to enter Iraq.
Earlier the group had claimed that the troops had crossed the border.
The military said it had launched an operation, backed by helicopter gunships, to catch the Kurdish fighters.
Troops were monitoring possible escape routes and shelling 63 "possible targets" with heavy artillery, it said.
In a separate incident, one person was killed and at least eight injured when a landmine exploded near a minibus in southeast Turkey.
|Erdogan has said that Turkey's response will be|
"calm" and "based on common sense" [AFP]
Ankara says about 3,500 PKK fighters use bases in the mountainous region across the nearby border with the autonomous Kurdish region in northern Iraq to attack Turkish targets.
On Saturday, Erdogan said his country expected the US and Iraq to take action against the PKK but would take its own measures if it saw no results.
Public anger is high in Turkey after recent attacks in the southeast as well as a perception that the United States has failed to back Turkey in its fight with the PKK, even though Washington lists the movement as a terrorist group.
Washington and Baghdad have urged Turkey not to carry out any unilateral action, fearing it could destabilse northern Iraq.
The Iraqi parliament on Sunday condemned Ankara's threat of incursions in a motion by 183 MPs in the 275-member national assembly.
"Iraq's parliament unanimously votes to condemn the threat of using force to solve the dispute.
|"We are not going to be caught up in the PKK and Turkish war, but if Kurdistan region is targeted, then we are going to defend our citizens" |
Massoud Barzani, president of Iraq's Kurdish region
It feels that the Turkish parliament's decision to use force does not boost bilateral relations," the motion said.
It also urged the government in Ankara to work with the Iraqi government and criticised Kurdish fighters operating from the north of Iraq.
Meanwhile, the leader of the largely autonomous Kurdish region of Iraq said it would defend itself from attack by Turkish forces.
"We are not going to be caught up in the PKK and Turkish war, but if Kurdistan region is targeted, then we are going to defend our citizens," Massoud Barzani told reporters after meeting Jalal Talabani, the Iraqi president.
He also ruled out handing over PKK leaders to Ankara. Erdogan has demanded that Baghdad close down the PKK camps and hand over the group's leaders.
Talabani reiterated Barzani's comments saying that the handover of PKK leaders "was a dream that will never be realised". "PKK's leaders are in Kurdistan's rugged mountains.
The Turkish military with its mightiness could not annihilate them or arrest them, so how could we arrest them and hand them to Turkey?" he asked.
However, he did urge the PKK to stop their attacks amid fears that a Turkish incursion would destabilise the relatively peaceful region of Iraq.
"We have appealed to the PKK to desist fighting and to transform themselves from military organisations into civilian and political ones," he said.
"But if they insist on the continuation of fighting, they should leave Kurdistan, Iraq, and not create problems here."
The PKK wants autonomy for Turkey's predominantly Kurdish southeast and more than 30,000 people have been killed since they began their fight in 1984.