The EU Commission has issued a statement sharply condemning the actions of the PKK, the outlawed Kurdish Workers' Party in southeastern Turkey and expressing understanding for Turkey's need to protect its citizens.

But enlargement commissioner Olli Rehn said Turkey and Iraq had to "solve the problem with cooperation and with regard to international law."

The German government has also appealed to Turkey to show restraint. German Foreign Minister Frank-Walter Steinmeier telephoned his Turkish counterpart Ali Babacan to urge Ankara to refrain from steps which could destabilize the region. Government spokesman Thomas Steg renewed this call.

'Sense of proportion'

"Now it is important to avoid this fresh provocation leading to a spiral of violence in the region. I appeal to the Turkish government to act with a sense of proportion in this difficult situation and avoid a dangerous destabilization of the region," Steg said.

The country's defense minister, Vecdi Gönül, has said he will not immediately enter the region. Instead, he said, he will wait for joint action with the US.

On Sunday afternoon, at least 12 Turkish soldiers were reported dead and 32 PKK members were killed in retaliation amid the bloodiest fighting in years between Kurdish PKK rebels and Turkish soldiers on the northern Iraq border.

In the wake of the news, Turkish Prime Minister Recep Tayyip Erdogan held an emergency meeting of political and military leaders, including Turkish President Abdullah Gül. After the meeting Gül issued a statement saying, "We will continue on our path of determination in fighting the terrorist organization. We respect Iraq's national borders. But (we) will not tolerate those who help and harbor terrorists."

According to Turkish military reports, on Sunday afternoon PKK fighters entered the Turkish province Hakkari from northern Iraq, attacking an army post there. Spokesmen for the Kurds say Turkish solders have been taken hostage; and Turkish officials told AFP news service that eight Turkish soldiers are missing.

Turkish lawmakers allow attack

But despite the intense border fighting, Turkish Defense Minister Gönül has said he would not immediately conduct a targeted invasion of the region. He told his US counterpart Robert Gates at a meeting in Kiev that the Turkish military is, indeed, planning such an attack, but he prefer that it be led together with the US, news reports said.

Last Wednesday, the Turkish parliament laid the way for a military attack by green-lighting a plan to allow for an invasion, should it come to that. The Turkish government passed the plan following months of pleading for US support in the region. Turkey, the US and the EU all consider the PKK to be a terrorist group.

Washington hopes to avoid armed conflict in northern Iraq, however. It fears bringing turbulence into the last peaceful region of the country, and also worries about further damage to its own image as an occupying force.

Moreover, the current regime in Teheran supports the underground PJAK group, which works together with the PKK.

For the past several months, PKK guerrilla fighters have been actively attacking Turkish military interests from within northern Iraq. A total of around 100 Turkish soldiers have died since the beginning of the year, prompting the Turkish army to massively boost the numbers of soldiers in the border region to approximately 60,000.

The PKK has been fighting for more autonomy in Kurdish regions for more than 20 years.

Oil interests could be involved

On Saturday, the PKK threatened attacks on oil pipelines in the region if Turkey decides in favor of military intervention in northern Iraq. Exports of oil produced near the northern Iraqi state of Kirkuk travel via the Turkish port of Ceyhan.

For its part, the Iraqi parliament called for the PKK to leave the country. News reports quoted Iraqi Parliament President Mahmud al-Maschhadani as saying: "We denounce attacks on neighboring states and we call for armed PKK members to leave Iraqi sovereignty."

But in a follow up to a meeting with the president of the autonomous Kurdish region in northern Iraq, Iraqi President Jalal Talabani, who is Kurdish, said his government could not combat the PKK. He reiterated Iraq's demand that PKK rebels lay down their arms and restated calls for a diplomatic solution; he wants the PKK to turn itself into a political organization.

Talabani: 'Not even a cat' will be handed over

Talabani angered Turks further on Sunday by saying, "We will not hand any Kurd over to Turkey, not even a Kurdish cat," according to media reports.

Northern Iraq is home to some 3,500 PKK fighters, according to Turkish estimates.

Turkish PM Erdogan wants to sit down together with US President Bush on Nov. 5 to discuss the troubles in northern Iraq. An Iraq conference including US Foreign Minister Condoleezza Rice is slated to take place in Istanbul prior to that meeting.